Global best practices in assessment and readiness for CCS retrofit : final report.
Date: 2016-10-13
Institutions: Directorate-General for Climate Action
Subjects: Australia, Canada, China, EU Member State, EU policy, Norway, United States, air quality, carbon, directive (EU), environmental law, environmental liability, environmental monitoring, environmental research, pollution, reduction of gas emissions, report, research and development

 Global best practices in 
assessment and readiness for 
CCS retrofit  

Final report 

October – 2016 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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EUROPEAN COMMISSION 

Directorate-General for Climate Action  

Directorate C - Climate strategy, governance, and emissions from non-trading sectors 

Unit C4 Road transport 

E-mail: CLIMA-CCS-DIRECTIVE@ec.europa.eu 

European Commission 
B-1049 Brussels

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Global best practices in assessment and 
readiness for CCS retrofit 

 
 
 
 
 
 
                 
 
Contents 

Executive summary ........................................................................................................... 1 

1 

2 
2.1 
2.2 

3 

Introduction 

4 

4 
Global progress on CCS readiness 
Country-specific progress ........................................................................................................ 4 
Other case studies and reports on CCS readiness ............................................................... 24 

Conclusions 

33 

Annex - Information from reviewed material 
37 
Checklist for the next coal power plant retrofit by SaskPower .............................................................. 37 
Reduction of CO2 Emissions from Coal-fired Generation of Electricity Regulations in Canada ........... 39 
Proposed CCS readiness requirements in Australia ............................................................................. 43 

References 

46 

iii 

 
 
  
 
 
 
Executive summary 

The objective of this study is to identify global current best practice on carbon capture and storage 
(CCS) readiness, drawing both on practical experience from jurisdictions around the world, and on 
industry literature written since the Directive 2009/31/EC on the geological storage of carbon dioxide 
(CCS Directive) was adopted in 2009. The lessons learned from these sources are synthesised and 
their relevance to EU Member States is evaluated. 

A review of international CCS readiness legislation confirmed that the most comprehensive policy and 
regulatory coverage on CCS readiness requirements is found within the EU. However, potentially 
relevant findings were identified through a review of legislation and CCS roll out experience in 
Canada, United States of America (USA), Australia, China and Norway, which are summarised below: 

Canada 

■ 

In recent years, Canada has delivered large-scale CCS projects driven by CO2-enhanced oil 
recovery (EOR) and Canada’s federal and provincial governments’ commitment to CCS. 

■  Canadian regulations for coal power plants include a temporary exemption from meeting an 
emissions performance standard (EPS), if it can be shown that the plant will be able to be 
retrofitted with CCS. This temporary exemption requires power plant developers to submit regular 
progress reports, in addition to the initial information that must be submitted, to demonstrate the 
plant will be able to be retrofitted with CCS.  

■  Alberta’s Regulatory Framework Assessment suggests promotion of efficient and fair 

development of CCS, by encouraging CCS project proponents to work together and allowing 
power plants to apply for access to other operator’s pipelines or storage sites.  

■  Learnings from the Boundary Dam Project suggest that, in addition to technical feasibility of the 
power plant, some important financial and market considerations must be taken into account, 
including potential market for any by-products such as CO2 for enhanced oil recovery.   

United States 

■  Deployment of CCS in USA is primarily motivated by enhanced oil recovery opportunities and 

government incentives at both the federal and state level.  

■  USA has taken considerable steps toward “storage readiness”, with the market and infrastructure 

for CO2 sequestration largely developed and assessed.  

■  Although there is no legislation on CCS readiness in the US, lessons can be taken from the 
recent Carbon Pollution Standards for New, Modified and Reconstructed Power Plants. In 
addition to the newly constructed power plants, the Carbon Pollution Standards apply to some of 
the existing units, which are modified or reconstructed. EPA also introduced different emissions 
standards for natural gas and coal power plants.  

Australia 

■  The proposed CCS Readiness standards in Australia (which never went into force) had similar 

guidelines as in Article 33. It provided a list of six specific requirements and noted that the primary 
one was the assessment of likely costs of CCS being eventually deployed on the CCS ready 
plant, when CCS was deemed commercially ready.  

■  The proposed standards required project developers to provide an annual report to the 

administering authority on their power plant’s compliance with the CCS Readiness standards. 

■  The Australian Government proposed that it would be mandatory for the power plants to 

implement the CCS retrofit within four years and complete the construction within seven years of 
the commercial availability of CCS being declared by the Government. The Australian 
Government proposed to conduct a review every two years to test the commercial viability of 
CCS, based on the technical, operational and commercial considerations.  

1 

 
 
  
 
 
China 

■  The recent Asian Development Bank report provides explicit and separate guidelines for each 

element of CCS: capture, transport and storage. These guidelines provide specific requirements 
for project developers to follow. It suggests that all coal power plants of above a threshold size (2 
GW or higher) should be sited within 200 kilometres of a major EOR field or geological storage 
formation. The report also suggests that developers should be encouraged to explore the option 
of a pipeline network that links various large CO2 point sources to reduce unit costs.  

■  The ADB report recommends that a mechanism allowing power plant developers to recover 

CCSR costs by introducing a tariff for electricity from a CCS Ready power plant be introduced. It 
is also suggested that plant developers be required to maintain CCS Ready planning documents 
for defined time periods and to report periodically on the CCS Ready status of plants. 

■  Finally, the report suggests that the government could consider including CCS Ready 

requirements in the approval process of energy-intensive industry in addition to power plants.  

Norway 

■  Norway has increased “national storage readiness” by establishing CCS legislation, developing a 

detailed CO2 Atlas and gaining experience from operational CO2 storage projects.  

■  Norway has already established policy that all new coal-fired generation incorporate CCS from 

the time of commissioning and operation. This shows that strong CCS policies or regulations (e.g. 
requiring all new fossil fuel-fired power plants to install CCS) may make CCS readiness 
requirements redundant.  

In addition to the country-specific best practices, further key learnings were identified through a review 
of academic and institutional reports on CCS readiness. These are explained in detail in the report. 

The following conclusions have been developed from the information collated during this review: 

1. 

Increasing storage readiness in the EU 

Storage readiness is a key component of CCSR, but the identification and assessment of 
potential storage sites is beyond the scope of project developers. Article 33 requires that all 
combustion plants with a rated electrical output of over 300 megawatts ensure that suitable 
storage sites are identified. To achieve this, developers of such projects in the EU will rely on 
storage data developed by the Member States. It is important that detailed data on storage 
capacity is available. 

EU Member States could move toward storage readiness by: 

■  carrying out collaborative multi-country storage assessments; 

■  developing CO2 storage datasets; 

■  appraising storage units;  

■  enabling deployment of pilot and/or commercial CO2 storage projects; and 

■  addressing legal challenges of cross-border CO2 transport and storage. 

These requirements are already called for in Article 4(2) of the CCS Directive.1 

2. 

Identifying locations of potential CO2 capture and storage clusters and feasible CO2 
pipeline routes within the EU 

CCS clusters are expected to be developed within the EU, in order to minimise transport and 
storage costs. Locations of potential clusters could be assessed as part of the CCS readiness 

1 The CCS Directive has the following requirement in Article 4(2): “Member States which intend to allow geological storage of 
CO2 in their territory shall undertake an assessment of the storage capacity available in parts or in the whole of their territory, 
including by allowing exploration pursuant to Article 5. The Commission may organise an exchange of information and best 
practices between those Member States, in the context of the exchange of information provided for in Article 27.” 

2 

 
 
  
 
                                                      
assessments. To qualify as CCS ready, power plants could be required to be located close to 
potential onshore CO2 capture clusters and/or shoreline hubs. Plans for developing these 
potential clusters could be developed by the EC and/or Member States by considering potential 
CO2 transport routes from onshore CO2 clusters to shoreline hubs / ports. 

Where plant developers can demonstrate the feasibility of CO2 capture and transport to a nearby 
potential cluster (which will likely be connected to storage sites through a large-scale CO2 
transportation network or shipping), requirements to identify specific storage sites for their 
projects could be relaxed. 

3.  Requiring increasing levels of CCS readiness, in the context of Article 33 

Member States can increase CCS readiness requirements, as part of Article 33 implementation, 
as the CCS market develops to reduce the risk of stranded assets and ‘carbon lock-in’ 

As an illustrative example a power plant commissioned before 2020 might be required to meet a 
minimum readiness threshold; while a plant commissioned after 2020 might need to meet a more 
stringent standard. An even more stringent regulation would require all fossil fuel-fired power 
plants commissioned beyond some future date to install CCS from the time of their 
commissioning. 

4.  Requiring regular progress reports as part of Article 33 compliance 

EU power plants developers could be required to submit regular (e.g. every 5 years) update 
reports on the CCS readiness status of their plants, taking into account: 

■  developments in CO2 capture technology, especially the technical and economic 

feasibility of capture given any cost reductions achieved; 

■  new transport opportunities, based on, for example, nearby over-sized transport 

infrastructure; 

■  storage availability based on the latest assessments; and 

■ 

relevant market factors, such as fuel and carbon prices, and government incentives. 

5.  Extending CCS readiness requirements to emissions intensive industry 

Overall industrial emissions need to be cut significantly in order to meet the 2050 CO2 reduction 
target. Analogous CCS Readiness requirements for energy and emissions intensive industrial 
subsectors, such as cement, chemicals, refining, and steel could be developed and rolled out by 
the EC. New industrial facilities could then be required to be CCS ready, and the costs and 
benefits of retrofitting existing plant could also be assessed. 

6.  Examining CO2 utilisation opportunities and government incentives 

Economic feasibility assessments required from project developers to demonstrate CCS 
readiness could consider all available incentives as well as the potential market for CO2  
by-products, including carbon dioxide enhanced hydrocarbon recovery (CO2-HER), also referred 
to as enhanced oil recovery (EOR). Although the EU ETS carbon price remains relatively low, 
potential government incentives and/or potential market for any by-products including CO2-EHR 
may improve commercial viability of CCS in the EU.

3 

 
 
  
 
1 

Introduction 

The objective of this study is to identify the current best practice on CCS readiness based on 
practical experience from jurisdictions around the world and international guidance 
documents. These diverse approaches are evaluated for lessons learned and their 
applicability to EU Member States. 

■  Section 2.1 presents country-specific progress on CCS readiness in Canada, United 
States, Australia, China and Norway. The process to identify these relevant countries 
and other project-specific case studies are also explained in the section. 

■  Section 2.2 presents the generic definition of CCS readiness, and key learnings from 

other case studies and reports published by key international organisations. 

■  Section 3 summarises the key lessons learned and best practices based on the 

materials reviewed and examines the applicability of the best practices to the EU 
Member States. 

2  Global progress on CCS readiness 

2.1  Country-specific progress  

2.1.1 

Identification of relevant countries outside the EU 

Relevant countries outside the EU have been identified based on the following criteria: 

■  CCS project development is based on the number of large-scale CCS projects, which 
are in “Operate”, “Execute”, “Define”, “Evaluate” and “Identify” stages2 and number of 
notable pilot and demonstration CCS projects.3 This criterion is included as key learnings 
for CCS retrofit can be identified from practical experience in project development 
outside the EU. The ranking has been assigned as follows: 

–  High: Countries with more than one large-scale CCS project. 
–  Medium: Countries with one large-scale or at least two notable CCS projects. 
–  Low: Countries with fewer than two notable CCS projects. 

■  National storage readiness4 is based on an assessment carried out by GCCSI in 2015, 
which considered storage potential, standard of country storage assessment, maturity of 
the assessment, pilot/commercial projects, and knowledge dissemination. The ranking 
has been assigned as follows: 

■ 

–  High: Prepared for wide-scale storage 
–  Medium: Well advanced 
–  Low: Making progress or just starting 
Inherent CCS interest5 illustrates potential interest countries may have in reducing 
emissions from fossil fuel sources by developing CCS based on global shares of fossil 
fuel production and consumption. Countries with high inherent interest in CCS are 
expected to have made progress in development of CCS legislation. It should be noted 
that this metric does not perfectly represent countries’ existing interest in CCS. Norway’s 
CCS interest rating has therefore been increased to “High” in this report. 

2 Large-scale CCS projects: http://www.globalccsinstitute.com/projects/large-scale-ccs-projects (accessed on 9 March, 2016). 
3 Notable projects: http://www.globalccsinstitute.com/projects/notable-projects (accessed on 9 March, 2016). 
4 Global CCS Institute, 2015, Global Storage Readiness Assessment 

4 

 
 
  
 
                                                      
■  The Constituent Policy Index5 is based on the relevant policy measures available in 
the country (i.e. direct support for CCS, carbon pricing, etc.). For both inherent CCS 
interest and constituent policy index, ranking has been assigned as follows: 

–  High: Upper Tier 
–  Medium: Upper-mid Tier 
–  Low: Lower-mid Tier or Lower Tier 

■  Legal and regulatory indicator6 of the country based on the national legal and 

regulatory CCS frameworks. Countries with more advanced CCS frameworks are 
expected to provide learnings for CCS Readiness requirements. 

–  High/Band A: CCS specific laws or existing laws that are applicable across most 

parts of the CCS project cycle 

–  Medium/Band B: CCS specific laws or existing laws that are applicable across parts 

of the CCS project cycle 

–  Low/Band C: Very few CCS specific or existing laws that are applicable across parts 

of the CCS project cycle 

Table 2.1: Scoring criteria to identify relevant countries 

CCS project development 

Ranking 

Large-scale 
CCS projects 
(number) 

Notable CCS 
projects 
(number) 

Rating 

High 

More than 1 

- 

High 

National 
storage 
readiness 

Inherent 
CCS 
interest 

Constituent 
Policy Index 

Legal and 
regulatory 
indicator 

Score 

Prepared 
for wide-
scale 
storage 

Upper 
Tier 

Upper Tier 

Band A 

2 

1 

0 

Medium 

Low 

1 

0 

or  
at least 2 

Medium 

Well 
advanced 

Upper-
mid Tier 

Upper-mid 
Tier 

Band B 

and  
less than 2 

Low 

Making 
progress 

Lower-
mid Tier 

Lower-mid 
Tier 

Band C 

The relevant countries have been ranked based on the criteria above. Table 2.2 summarises 
the assessment of these countries against the criteria. USA, Canada, Australia, China and 
Norway, which have the highest scores, are selected and assessed in more detail in the 
following sections.  

5 Global CCS Institute, 2015, Carbon Capture and Storage Policy Indicator (CCS PI) 2015 Update 
6 Global CCS Institute, 2015, Global CCS Institute CCS Legal and Regulatory Indicator – A Global Assessment of National 
Legal and Regulatory Regimes for Carbon Capture and Storage 

5 

 
 
  
 
 
 
                                                      
Table 2.2: Assessment of countries outside the EU 

CCS project development 

Country 

USA 

Canada 

Norway 

Australia 

China 

South Korea 

Japan 

Brazil 

Mexico 

India 

Indonesia 

Russia 

Saudi Arabia 

UAE 

New Zealand 

South Africa 

Large-scale 
CCS projects 
(number) 

Notable CCS 
projects 
(number) 

12 

17 

6 

2 

3 

9 

2 

0 

1 

0 

0 

0 

0 

1 

1 

0 

0 

4 

0 

5 

9 

2 

7 

1 

0 

1 

0 

0 

0 

0 

0 

0 

National storage 
readiness 

Inherent CCS 
interest 

CCS project 
development 

High 

High 

High 

High 

High 

High 

Medium 

Medium 

Low 

Low 

Low 

Low 

Medium 

Medium 

Low 

Low 

High 

High 

High 

Medium 

Medium 

Low 

Low 

High 

Low 

Low 

Low 

Low 

Medium 

Medium 

Low 

Low 

High 

High 

High 

Medium 

High 

Medium 

Medium 

Medium 

Medium 

High 

High 

High 

Low 

Low 

Low 

Medium 

6 

CCS policy, legal and regulatory 
development 

Constituent 
Policy Index 

Legal and 
regulatory 
indicator 

High 

High 

Medium 

Medium 

Medium 

Medium 

Medium 

Low 

Low 

Low 

Low 

Low 

Low 

Low 

Low 

Low 

High 

High 

Medium 

High 

Low 

Medium 

Medium 

Low 

Medium 

Low 

Low 

Low 

Low 

Low 

Medium 

Low 

Total 
score 

10 

10 

8 

7 

6 

5 

4 

4 

2 

2 

2 

2 

2 

2 

1 

1 

 
 
  
 
 
 
2.1.2  Canada 

2.1.2.1  Background 

In recent years, Canada has delivered large-scale CCS projects driven by CO2-enhanced oil 
recovery (EOR) and Canada’s federal and provincial governments’ commitment to CCS:7 

■  Over 25 million tonnes of CO2 have been stored during the CO2-EOR operations in the 

Weyburn and Midale oilfields since 2000. CO2 has been sourced from a gasification plant 
in North Dakota and transported to Saskatchewan, Canada.7  

■  The world’s first operational large-scale power plant CCS project, the Boundary Dam 

Carbon Capture Project, was launched in 2014 in Canada. Most of the captured CO2 is 
used for enhanced oil recovery operations and the remaining CO2 is injected into a saline 
formation. In 2015, the Boundary Dam Project achieved the significant milestone of one 
year of operation.8 IEAGHG has recently published the key learnings from the Boundary 
Dam Project.9 The box below summarises the key considerations that must be taken into 
account to be able to transfer the business model to a different jurisdiction. See Annex 1 
for a checklist developed by SaskPower for the next coal power plant retrofit. 

■  The Quest Project, world’s first commercial-scale CCS project in an industrial processing 
facility storing more than one million tonnes of CO2 per year, was launched in 2015.10 
The captured CO2 is stored in a deep saline formation. 

Box 2.1 

Boundary Dam Project 

Learnings from the Boundary Dam Project 

A recent IEAGHG report summarises the experience and learnings of SaskPower from 
the Boundary Dam project. The report suggests that the following considerations must 
be taken into account in order to transfer the business model from Boundary Dam to a 
different power plant and jurisdiction. Although these considerations are more focussed 
on CCS deployment in general, economic assessments to demonstrate CCS readiness 
in the EU may also include these important issues. 

  Financial: carbon tax, Government grant, Government incentives, financing, fossil 

fuel price forecasts, redundancy 

  Market: potential demand for CO2 (e.g. enhanced oil recovery), potential market 

for any by-products, electricity price forecasts 

  Technical design: engineering, technology choice, reliability, operational 

forecasts, risk tolerance of organisation, optimising plant efficiency, modular 
construction 

  Construction: Availability of skilled labour, internal experience, experienced 

construction or EPC firms, modularisation yards within reasonable transportation 
distance 

2.1.2.2 

CCS regulation 

Canada’s 2012 Reduction of Carbon Dioxide Emissions from Coal-fired Generation of 
Electricity Regulations requires all coal power plants to be refitted with CCS to achieve a 
certain performance standard or retire after 50 years of operation.7 Temporary exemptions 

7 GCCSI, 2014, Global Status of CCS 
8 GCCSI, 2015, Global Status of CCS – Summary Report 
9 IEAGHG, 2015, Integrated Carbon Capture and Storage Project at Saskpower’s Boundary Dam Power Station 
10 Shell, 2015, The Quest for Less CO2: Learnings from CCS Implementation in Canada 

7 

 
 
  
 
 
                                                      
 
are offered until 2025 if the plant can be retrofitted with a carbon capture and storage system 
by then.11 This temporary exemption is similar to the CCS Readiness requirements in the EU 
and is examined in more detail in the next section. 

In order to ensure that the required regulations are in place, the Government of Alberta 
initiated the Regulatory Framework Assessment (RFA) in 201112, which examined in detail 
the technical, environmental, safety, monitoring and closure requirements of a CCS project. 
The RFA process, which was concluded in December 2012, included 71 individual 
recommendations, 9 conclusions and 25 actions for the Government of Alberta. Although the 
RFA did not specifically examine CCS readiness, learnings can be withdrawn from some of 
the recommendations for “Applications, Approvals and Regulatory Framework”, in particular, 
requirements for plant operators to: 

■ 

“Define the roles and responsibilities of each regulator of CCS operations and create 
clear industry guidance documents; 

■  Require monitoring, measurement and verification (MMV) plans and closure plans to 

accompany all CCS related applications to the regulator and all tenure applications to the 
Department of Energy; 

■  Promote efficient and fair development of CCS by: 

–  Encouraging CCS project proponents to work together, 

–  Allowing proponents to apply for access to another operator’s pipelines or 

sequestration site(s) if private negotiations have failed and established conditions 
have been met, and 

–  Changing tenure agreements to enable tenure to be revoked if it remains unused.” 

In British Columbia, the Ministry of Natural Gas Development is developing a regulatory 
policy framework for CCS, which is currently under consultation; the regulations for CCS are 
found in the Oil and Gas Activities Act (OGAA) and the Petroleum and Natural Gas Act 
(P&NG Act). Other elements are expected to be added to this regulatory regime for CCS 
projects.13 

2.1.2.3 

Legislation for CCS readiness 

As explained above, Canadian regulations for coal power plants include a temporary 
exemption from meeting an emissions performance standard (EPS) if it can be shown that 
the plant will be able to be retrofitted with CCS. Although not an explicit regulation on CCS 
Readiness, the requirements are relevant. To be able to be eligible for a temporary 
exemption, the project developer should submit the following information: 

■  An economic feasibility study that provides project cost estimates and identifies the 

source of financing to demonstrate the economic viability; 

■  A technical feasibility study demonstrating that there are no technical barriers for 
capturing the required amount of CO2, transporting the captured CO2 to a suitable 
storage site, and storing the captured CO2; 

■  An implementation plan that provides a description of the work to be done, which is a 

staged implementation of CCS, with the following requirements: 
–  Front-end engineering design study to be carried out by the 1st January 2020 
–  Major equipment to be purchased by the 1st January 2021 
–  Contract for CO2 transport and storage to be in place by the 1st January 2022 

11 Government of Canada, Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations 
(SOR/2012-167) - Regulations are current to 2016-02-03 and last amended on 2015-07-01 
12 Alberta Energy, 2013, Carbon Capture and Storage Summary Report of the Regulatory Framework Assessment 
13 Province of British Columbia Ministry of Natural Gas Development, 2014, Carbon Capture and Storage Regulatory Policy - 
Discussion and Comment Paper 

8 

 
 
  
 
                                                      
–  Permits and approvals to be obtained by the 1st January 2022 
–  Plant to be able to capture CO2 by the 1st January 2024 

In addition to the initial documents submitted in order to be granted a temporary exemption, 
project developers must submit an implementation report that contains the following 
information each year following the grant of the temporary exemption: 

■  Steps taken in that year to construct the required elements of the CCS projects and to 

integrate these elements with the unit; 

■  Requirements satisfied in that year; 

■  Any changes to the proposed engineering design for the CCS project; and 

■  Description of the steps needed to meet all the remaining requirements and to complete 

the project by the 1st January 2025.  

2.1.2.4  Key learnings and best practices 

■  Learnings from the Boundary Dam Project suggest that in addition to technical and 

economic feasibility of the power plant, some important financial and market 
considerations must be taken into account, including government incentives and the 
potential market for any by-products such as CO2 for enhanced oil recovery. Economic 
feasibility assessments carried out by the project developers in the context of Article 33 
may also include these important elements of financial and market considerations and 
viability of government incentives and value of by-products in the future. 

■  Alberta’s Regulatory Framework Assessment suggests promotion of efficient and fair 
development of CCS by encouraging CCS project proponents to work together and 
allowing power plants to apply for access to other operator’s pipelines or storage sites. 
As CCS clusters are expected to be developed in the EU to minimise transport and 
storage costs, member state competent authorities and governments can support Article 
33 implementation by providing guidance on locations of potential clusters in the country-
level CCS readiness assessments.  

■  The Canadian regulations on temporary exemption from meeting an EPS requires power 
plant developers to submit regular progress reports, in addition to the initial information 
that must be submitted, to demonstrate the plant will be able to be retrofitted with CCS. 
Project developers in the EU could be required to submit regular progress reports on the 
plant’s compliance with the CCS Readiness standards, in addition to the initial 
application documents submitted to qualify as CCSR. 

9 

 
 
  
 
 
 
 
2.1.3  United States of America 

2.1.3.1  Background 

The Department of Energy (DOE) considers CCS as a key technology to meeting USA 
climate targets while ensuring energy security; it therefore provides significant federal 
funding support for projects to test capture technologies under the Clean Coal Power 
Initiative, and has awarded $6.1bn to CCS and clean coal projects to date14.  

A range of the proposed industrial scale projects are shown in Table 2.3. Government 
typically provides between 25% and 75% of the total funding of these schemes. Smaller 
scale grants are available from subsidiary bodies, such as the National Energy Technology 
Laboratory (NETL) which awarded eight smaller schemes awarded a total of $25m in 
September 201515. 

Table 2.3: Large Scale USA CCS Projects in Development 

Project  

Description 

DOE Funding 

EOR 

CO2 storage  

Texas 
Clean 
Energy 
Project16 

Petra Nova 
CC Project, 
Texas17 

Illinois 
Industrial18 

Kemper 
County 
Energy 
Facility19 

Associated with a new build IGCC plant, the engineering 
studies have been completed and contractual arrangements 
are under discussion.  

$450m with a 
further $637m 
in tax credits. 

Yes 

2.4 Mt/year 

Associated with the retrofit of unit 8 of the W.A. Parish power 
plant near Houston, this will be the world’s largest post-
combustion capture project at a power station when it is 
launched in late 2016.  

Expected to begin in 2016, this will be the world’s first large-
scale bio-CCS project, at the Archer Daniel Midlands corn-to-
ethanol facility in Decatur. 

$167m 

Yes 

1.4 Mt/year 

$141m  

No 

1.0 Mt/year 

When operational in late 2016, this IGCC plant be the largest 
CCS power project in the by volume of CO2 captured. Already 
over 2 years late and 200% over budget, this project has been 
beset by delays. 

$270m grant 
and $133m in 
investment tax 
credits 

Yes 

3.0 Mt/year 

Many states in USA provide financial incentives for CCS including grants, loans, tax 
incentives, off-take agreements, utility cost recovery mechanisms, and others. The Centre 
for Climate and Energy Solutions has an online map of financial incentives for CCS in the 
US.20 

CO2-enhanced oil recovery accounts for a large majority of total CCS projects in the US; with 
a total CO2 pipeline network of 3,600km serves over 140 operational EOR oil fields, which 

14 DOE; Clean Coal Power Initiative http://energy.gov/fe/science-innovation/clean-coal-research/major-demonstrations/clean-
coal-power-initiative (accessed on 22 March 2016) 
15 NETL, Press Release, 2015 http://www.netl.doe.gov/newsroom/news -releases/news-details?id=b3b81c98-25e0-
4698-892d-c7e74b71cad5 (accessed on 22 March 2016) 
16DOE ,Texas Clean Energy Project, http://energy.gov/fe/texas-clean-energy-project (accessed on 22 March 2016) 
17 GCCSI, Petra Nova Carbon Capture Project, https://www.globalccsinstitute.com/projects/petra-nova-carbon-capture-project 
(accessed 22 March 2016) 
18 GCCSI, Illinois Industrial CCS Project, https://www.globalccsinstitute.com/projects/illinois-industrial-carbon-capture-and-
storage-project (accessed on 22 March 2016) 
19 MIT CC&ST Program, Kemper County IGCC Fact Sheet, https://sequestration.mit.edu/tools/projects/kemper.html (accessed 
22 March 2015) 
20 Centre for Climate and Energy Solutions, Financial Incentives for CCS, http://www.c2es.org/us-states-regions/policy-
maps/ccs-financial-incentives (Accessed on 30 March 2016) 

10 

 
 
  
 
 
 
 
 
                                                      
have injected more than 3.5Mt CO2 to date (there is a total of over 6,000km of CO2 pipeline 
in the US)21.  

Under the DOE CCS Regional Partnerships programmes, USA has taken considerable steps 
toward “storage readiness”, with the market and infrastructure for CO2 sequestration largely 
developed and assessed.22 Detailed storage resource surveys commissioned by the DOE 
estimate national onshore capacity for at least 1,800, and possibly as high as 20,000 
Gigatonnes of CO2, equivalent to at least 600 years of total current emissions output.23 
These surveys can be helpful to project developers, as and when CCS becomes a more 
established technology in the U.S. 

2.1.3.2 

CCS regulation 

The USA Clean Air Act lays out the approaches for new and existing energy generators 
under Section 111. Recently, EPA finalised two rules under Section 111 of the Clean Air Act 
to reduce CO2 emissions of power plants:24 

■  EPA’s Clean Power Plan for Existing Power Plants: On August 3, 2015, President 
Obama and EPA announced the Clean Power to reduce carbon pollution from power 
plants in the US. Briefly, the Clean Power Plan sets interim and 2030 targets for 
emission rates for each state, and provides incentives and tools to assist them in 
meeting these targets.25 States have the flexibility to choose how to meet their targets. 
On February 9, 2016, the Supreme Court decided to halt the Clean Power Plan; 
however, EPA will continue to work with the states. CCS is included in the plan as a 
compliance measure: “After consideration of the variety of comments we received on this 
issue, we are confirming our proposal that CCS is not an element of the BSER, but it is 
an available compliance measure for a state plan.”24  

■  Final Carbon Pollution Standards for New, Modified and Reconstructed Power 

Plants: EPA set standards to limit CO2 emissions from new, modified and reconstructed 
power plants. These standards are examined in the next section. 

Federal regulation of CCS reservoirs comprises two main pieces of legislation; the 
Underground Injection Control (UIC) Class VI rule26 which regulates the siting, construction, 
testing, monitoring, and closure of sequestration wells; and the Greenhouse Gas Reporting 
Program27, which includes requirements on the monitoring of CCS reservoirs.  

Additional environmental protections are planned under the Resource Conservation and 
Recovery Act. In addition to the regulation of CCS reservoirs, Class II rules apply specifically 
to enhanced oil recovery (EOR).28 29 

21 Advanced Resources International, 2014, OGI EOR/Heavy Oil Survey 
22 DOE Carbon Storage Monitoring, Verification And Accounting Research, http://energy.gov/fe/science-innovation/carbon-
capture-and-storage-research/carbon-storage-monitoring-verification-and (accessed 22 March 2016) 
23 Environmental Protection Agency, Carbon Dioxide Capture and Sequestration, https://www3.epa.gov/climatechange/ccs/ 
(accessed 22 March 2015) 
24 Clean Power Plan for Existing Power Plants, https://www.epa.gov/cleanpowerplan/clean-power-plan-existing-power-plants 
(accessed on 31 March 2016) 
25 EPA, Q&A: EPA Regulation of Greenhouse Gas Emissions from Existing Power Plants: 
http://www.c2es.org/federal/executive/epa/q-a-regulation-greenhouse-gases-existing-power (accessed on 31 March 2016) 

26 EPA, Class VI - Wells used for Geologic Sequestration of CO2 https://www.epa.gov/uic/class-vi-wells-used-geologic-
sequestration-co2 (accessed 22 March 2015) 
27 EPA, Greenhouse Gas Reporting Program, https://www.epa.gov/ghgreporting, (accessed on 25 March 2016) 
28 EPA, Class II Oil and Gas Related Injection Wells https://www.epa.gov/uic/class-ii-oil-and-gas-related-injection-wells 
(accessed on 22 April 2016) 
29 At state level, CCS was identified as an option to reduce emissions from power and industrial emitters in California under both 
the Low Carbon Fuel Standard (LCFS) and the Cap-and-Trade Program in the First Update to the Assembly Bill (AB) 32 
Scoping Plan to achieve the near-term 2020 emissions limit. Source: California Environmental Protection Agency Air Resources 
Board, 2014, First Update to the Climate Change Scoping Plan (Building on the Framework Pursuant to AB 32) 

11 

 
 
  
 
 
                                                      
2.1.3.3 

Legislation for CCS readiness 

Although there is no legislation on CCS readiness in the US, learnings can be withdrawn 
from the recent Carbon Pollution Standards for New, Modified and Reconstructed Power 
Plants.  

In addition to the newly constructed power plants, the Carbon Pollution Standards apply to 
some of the existing units, which are modified or reconstructed, as defined by EPA:30 

■  A new source is any newly constructed fossil fuel‐fired power plant that commenced 

construction after January 8, 2014. 

■  A modification is any physical or operational change to an existing source that 

increases the source's maximum achievable hourly rate of air pollutant emissions. This 
standard would apply to units that modify after June 18, 2014. 

■  A reconstructed source is a unit that replaces components to such an extent that the 
capital cost of the new components exceeds 50 percent of the capital cost of an entirely 
new comparable facility. This standard would apply to units that reconstruct after June 
18, 2014. 

The EPA also introduced different standards for two types of fossil‐fuel fired sources (i.e. 
stationary combustion turbines, generally firing natural gas; and electric utility steam 
generating units, generally firing coal). Similarly, CCS readiness requirements could be 
differentiated for coal and gas power plants in the EU. 

A summary of the emission standards is shown below: 

Table 2.4: Summary of Carbon Pollution Standards in USA31 

Affected Electric Generating Unit  

Best System of Emission Reduction (BSER) 

Final Standards 

Newly Constructed Fossil Fuel-
Fired Steam Generating Units 

Efficient new supercritical pulverized coal (SCPC) 
utility boiler implementing partial CCS 

1,400 lb CO2/MWh-g 

Modified Fossil Fuel-Fired Steam 
Generating Units 

Most efficient generation at the affected EGU 
achievable through a combination of best operating 
practices and equipment upgrades 

1,800 or 2,000 lb CO2/MWh-g 
depending on the heat input 

Reconstructed Fossil Fuel-Fired 
Steam Generating Units 

Most efficient generating technology at the affected 
source (supercritical steam conditions for the larger; 
and subcritical conditions for the smaller) 

1,800 or 2,000 lb CO2/MWh-g 
depending on the heat input 

Newly Constructed and 
Reconstructed Fossil Fuel-Fired 
Stationary Combustion Turbines 

Efficient NGCC technology for base load natural 
gas-fired units and clean fuels for non-base load and 
multifuel-fired units 

1,000 or 1,030 lb CO2/MWh-g 
for base load natural gas-
fired units 

Earlier versions of the rule required a more stringent 1,100 lb CO2/MWh target, or an 
average or 1,050 lb CO2/MWh averaged over the first 7 years of operation; these have 
now been relaxed. Also, the standard for natural gas generators (1,000 lb CO2/MWh) of 
which far more are expected to be built by 2020, is insufficiently stringent to require CCS.  

30 EPA, Fact Sheet: Carbon Pollution Standards: https://www.epa.gov/sites/production/files/2015-11/documents/fs-cps-
overview.pdf (accessed on 31 March 2016) 
31 USA Government, Federal Register Vol. 80 No. 205 Part II: https://www.gpo.gov/fdsys/pkg/FR-2015-10-23/pdf/2015-
22837.pdf (accessed on 31 March 2016) 

12 

 
 
  
 
 
                                                      
2.1.3.4  Key learnings and best practices 

■  Deployment of CCS in USA is primarily motivated by enhanced oil recovery opportunities 

and government incentives at both federal and state level. These drivers could be 
included in the economic assessments carried out to demonstrate CCS readiness in the 
EU. However, an assessment of risks of changes in commodity and CO2 supply prices 
should also be considered (particularly given that the economics of EOR is based on 
relatively strong oil prices) 

■  USA has taken considerable steps toward “storage readiness”, with the market and 

infrastructure for CO2 sequestration largely developed and assessed.  

■ 

In addition to the newly constructed power plants, the Carbon Pollution Standards apply 
to some of the existing units, which are modified or reconstructed. CCS readiness 
requirements at the Member State level in the EU could also apply to existing power 
plants that are in the process of being significantly modified or reconstructed considering 
potential negative impacts of such requirements – e.g. some sensible upgrades might 
not be done in order to avoid meeting this requirement.32  

■  EPA introduced different emissions standards for natural gas and coal power plants. 

Similarly, CCS readiness requirements could be differentiated for coal, gas and biomass 
power plants in the EU Considering potential consequences of differentiation – e.g. less 
stringent regulations for a fuel type or technology would discourage investment in other 
fuel types and technologies. 

32 Requiring readiness at the EU level might require an amendment of Article 33 of the CCSD. 

13 

 
 
  
 
 
 
 
                                                      
2.1.4  Australia 

2.1.4.1  Background 

Given its large coal reserves and high per capita emissions, Australia remains committed to 
CCS, and has developed a robust legislative framework for the steps and lifecycle of CCS 
projects. 
According to the GCCSI33, Australia has a comprehensive legal and regulatory CCS 
framework. In particular, the Australian framework is well developed in terms of its ease of 
use, coherence of project licensing and regulatory approval, and the extent to which the legal 
and regulatory framework provides for the appropriate siting and environmental impact 
assessment of projects. Despite this, there are some regulatory differences by state, 
particularly around the difficult issue of long term liability and indemnification. 

Currently, three large-scale CCS projects are in development in Australia including the 
Gorgon Carbon Dioxide Injection Project, which is a gas washing project that will be the 
largest CCS scheme in the world when operational. 

Australia is also cooperating with China in the China-Australia Geological Survey (CAGS) 
which aims to identify available storage reservoirs in both countries and share knowledge.34 

2.1.4.2 

CCS regulation 
The Offshore Petroleum and Greenhouse Gas Storage Act 200635 and supporting legislation 
are dedicated to the regulation of pipeline transportation, injection and storage of CO2 in 
geological formations in offshore areas, and allow for the establishment of a regulatory 
framework for environment and safety requirements and the award of licenses for the 
exploration of potential geological storage formations. 

The power to assess and accept environment plans has been delegated to the National 
Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) under 
the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations36 and the 
monitoring of these reservoirs is governed by the Offshore Petroleum and Greenhouse Gas 
Storage (Greenhouse Gas Injection and Storage) Regulations37. 

Australian CCS policy is defined in these three acts and the associated legislation and best 
practice documents. However, long term risk sharing and insurance of reservoirs are not 
explicitly addressed in any of the current Australian policy instruments. 

2.1.4.3 

Legislation for CCS readiness 
The Australian Labor government of 2010 sought to introduce a CCS readiness standard3839, 
under which it was proposed that: 
■ 

“approval will only be granted to new coal-fired generators which are capable of 
retrofitting CCS technologies; 

■  all new coal-fired generators will be required to retrofit CCS technologies within an 

appropriate time after they become commercially available; and 

33 GCCSI, 2015, Institute Legal Regulatory Indicator 
34 Australian Government, International Carbon Capture and Storage Project, http://www.ga.gov.au/about/what-we-
do/projects/energy/international-ghg (accessed 25 March 2015) 

35 Australian Government, 2006, Offshore Petroleum and Greenhouse Gas Storage Act 
36 Australian Government, 2009, Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 
37 Australian Government, 2011, Offshore Petroleum and Greenhouse Gas Storage (Greenhouse Gas Injection and Storage) 
Regulations 
38Australian Government, 2010,  A Cleaner Future For Power Stations, http://industry.gov.au/Energy/Documents/sustainability-
and-climate-change/DiscussionPaperCleanerFuturePowerStation.pdf  
39 GCCSI, 2012, CCS ready policy and regulations – The state of play 

14 

 
 
  
 
                                                      
■ 

the standard for CCS ready, tailored for Australian conditions, will be determined by the 
Government in consultation with stakeholders.” 

The key aspects of the proposed CCS readiness legislation are summarised in the box 
below. The proposed legislation was put out for stakeholder consultation, with industry 
contending that the parallel introduction of a carbon tax made the CCSR policy unnecessary. 
Following the introduction of a carbon tax in the 2011 Clean Energy Bill, it was therefore 
announced in the Draft Energy White Paper on 13 December 2011 that the Government 
would not proceed with the CCS readiness requirements for new coal-fired power plants.40 

41 was only in operation for 2 years,42 it is difficult 
As the carbon tax of around $23/tonne CO2
to judge the accuracy of this assessment. To date, no similar CCS requirements have been 
introduced at the national level. 
At the state level, Queensland has had an extant CCSR Policy since August 200943. No new 
coal-fired power station will be approved in Queensland unless: 

■ 

■ 

“it uses world’s best practice low emission technology in order to achieve the lowest 
possible levels of emissions; and 

it is carbon capture and storage (CCS) ready and will retrofit that technology within five 
years of CCS being proven on a commercial scale. 

■  Note: in Queensland “CCS ready” means that the proponent must demonstrate plans 

and milestones for incorporation of CCS.” 

The Bluewaters Power Plant in Western Australia (WA) was also made subject to a CCSR 
requirement44 in 2009; the relevant conditions are: 

■ 

“Condition 7-1 which requires a plant layout figure to be submitted to the EPA which 
clearly delineates the area of land to be set aside to accommodate carbon capture 
related plant, and to quarantine it to prevent the construction of non-carbon capture 
related plant and equipment within it; 

■  Condition 7-2 which requires progress made towards the implementation of CCS be 

reported to the EPA; and 

■  Condition 7-3 which requires retrofitting of carbon capture and storage within five years 

of the technology becoming economically and technically proven.” 

41 GCCSI, 2012, CCS ready policy and regulations – The state of play 
42 Australian Government, 2015, About the Mechanism http://www.cleanenergyregulator.gov.au/Infohub/CPM/About-the-
mechanism 
43 Queensland Government, 2009, ClimateQ: toward a greener Queensland 
44 Western Australia, 2010, Report and Recommendations of the  Environmental Protection Agency 
http://www.epa.wa.gov.au/epadoclib/1349/rep1349blue3_4per8310.pdf  

15 

 
 
  
 
 
 
 
                                                      
 
Box 2.2 

CCS readiness legislation in Australia 

Key aspects of the proposed CCS readiness legislation in Australia 

The suggested Carbon Capture and Storage Reediness (CCSR) criteria comprised six 
requirements: 

1. 

2. 

“Demonstrate sufficient space and access on site and within the facility to 
accommodate carbon capture and compression facilities for the majority of the 
plant’s CO2 emissions; 
Identify potential areas for long term geological storage of captured CO2 
(meeting the plant’s capture needs) 

3.  Undertake a site specific assessment into the technical and economic 

feasibility of the CO2 capture retrofit using one or more technology choices; 
Identify a realistic transport method to identified storage sites; 

4. 
5.  Demonstrate measures and approvals that deal with the collection and 

treatment of pollutants resulting from the capture process and provisions for 
increased water requirements; and 

6.  Estimate the likely costs of retrofitting capture, transport and storage. 

Although all of the requirements must be applied, item 6 is classed as the key 
requirement.” 

Project developers were to be required to provide annual reports to the relevant 
ministry on the power plant’s compliance with these CCS readiness standards and to 
update feasibility assessments based on the global CCS situation. The Government 
proposed to conduct a review every two years to test the commercial availability of 
CCS, which would consider: 

 

 

“the technical viability of CCS, and whether retrofitting a plant is both operable 
from an engineering perspective and of a comparable scale; 
the operational viability of each element of the technology in conjunction with 
other elements (i.e. carbon capture along with CO2 transport and storage); and 

  Australia-specific factors affecting the commercial availability of equipment.” 

Commercial availability of CCS was defined as: 

 

 

“integration of the entire CCS chain has been proven at a comparable scale 
and technology in several demonstration plants worldwide; 
the systems comprising CCS are readily attainable; and safety and 
environmental risks (CO2 leakage) have been minimised. (e.g. the potential for 
carbon leakage from storage sites)” 

The Government stated that if the report confirmed that CCS was commercially 
available, it would be mandatory for the power plants to implement the CCS retrofit 
within four years and complete the construction within seven years. 

16 

 
 
  
 
 
 
 
 
 
2.1.4.4  Key learnings and best practices 

■  The proposed CCS Readiness standards in Australia (which never went into force) had 

similar guidelines as in Article 33. It provided a list of six specific requirements and noted 
that the primary one was the assessment of likely costs of CCS being eventually 
deployed on the CCS ready plant, when CCS was deemed commercially ready. 
Similarly, it might be helpful to have a priority-driven list of requirements in the EU.  

■  The Australian Government proposed that it would be mandatory for the power plants to 
implement the CCS retrofit within four years and complete the construction within seven 
years of the commercial availability of CCS being declared by the Government. The EU 
may also consider explicitly defining when CCS is “commercially available” and therefore 
there is an obligation for CCS ready power plants to start deploying CCS. 

■  The Australian Government proposed to conduct a review every two years to test the 
commercial viability45 of CCS, based on the technical, operational and commercial 
considerations. A similar review could be conducted by the European Commission or 
Member States in the EU. 

■  The proposed standards required project developers to provide an annual report to the 
administering authority on their power plant’s compliance with the CCS Readiness 
standards. Similarly, project developers in the EU could be required to submit regular 
progress reports on the CCS readiness status of their plants in addition to the initial 
application document submitted to comply with Article 33. 

45 CCS Directive has a similar clause in Article 38.3 but for EPS: “Where permanent containment of CO2 in such way as to 
prevent and, where this is not possible, eliminate as far as possible negative effects and any risk to the environment and human 
health, and the environmental and human safety of CCS have been sufficiently demonstrated, as well as its economic feasibility, 
the review shall examine whether it is needed and practicable to establish a mandatory requirement for emission performance 
standards for new electricity-generating large combustion installations pursuant to Article 9a of Directive 2001/80/EC.” 

17 

 
 
  
 
 
 
 
                                                      
2.1.5  China 

2.1.5.1  Background 

China has pledged to reach peak CO2 emissions by 203046. Around three billion tonnes of 
CO2 are emitted each year from China’s power plants, with up to 1bn tonnes CO2 emitted 
per year through the growing coal-chemical industry47. The latter constitutes an opportunity 
for the early development of CCS, due to their large scale and the low cost of CO2 
separation given the processes involved and potential local EOR opportunities. 

Onshore storage is feasible in the north and centre of China, where the main coal-chemical 
industries are located, but more difficult in the south east, where offshore storage may be the 
only option.47 

China has not introduced a carbon tax, but seven pilot cap and trade schemes run at the 
province level, with a national scheme planned for roll out by 201748. However, due to the 
scale and concerns around program design, information provision and political acceptability 
it is likely to be some time before this creates a carbon price of the required order to 
incentivise CCS. 

There are nine large-scale CCS projects, which are being developed in China as identified 
by GCCSI.49 China also cooperates with USA and Australia on CCS storage identification 
and assessment. 

2.1.5.2 

CCS regulation 

A number of reports, such as those produced by the Asian Development Bank (ADB), 
highlight the need for the CCS retrofit of coal power plants currently in or near construction 
during the 2030’s in order to meet China’s emissions reductions target. Despite this, no 
government policy demands the CCS retrofitability of new power generating or industrial 
facilities. 

Although 11 pilot projects are currently in development and more than CNY 3bn ($0.5bn) 
have been spent on CCS RD&D, central government remains the only source of support for 
CCS projects, and there are no operational industrially sized projects. 

There is also no developed framework for storage resource assessment and licensing, no 
large scale market for captured CO2 for EOR, no legislation around insurance and risk 
sharing, and no policy around storage assessment and accreditation. 

Legislation for CCS readiness 
The ADB report47 recommends a four phase approach to CCS roll out in China, with 
definition of a readiness standard and the development of a compensation or incentivisation 
mechanism the key first steps. In particular, it recommends that the 1,000 GW of coal power 
plants that will be built in China by 2030 are made CCS retrofitable and are sited within a 
reasonable distance (less than 200km) of a storage site, in order to mitigate the risk of these 
assets becoming stranded due to carbon intensity policy; specific examples of suitable plants 
in planning are given in the report. 

The report also points out the key policy and regulatory challenges to the creation of a 
national CCSR policy, and makes a set of policy recommendations as summarised below. 

2.1.5.3 

46 UNFCC, 2015, INDCs, http://www4.unfccc.int/submissions/INDC/Submission%20Pages/submissions.aspx 
47 ADB, November 2015, Roadmap For Carbon Capture And Storage Demonstration And Deployment In The People’s Republic 
Of China, http://www.adb.org/publications/roadmap-carbon-capture-and-storage-demonstration-and-deployment-prc  
48 Carbon Tax Centre, 2016, What About China http://www.carbontax.org/what-about-china/ (accessed 25 March 2016) 
49 Large-scale CCS projects: http://www.globalccsinstitute.com/projects/large-scale-ccs-projects (accessed on 9 March, 2016) 

18 

 
 
  
 
                                                      
Table 2.5: Key challenges of CCS Ready in China and recommendations47 

Factor 

Key challenges 

Recommended steps 

Commercial 

  CCS Readiness requires up-front 
investments in plant design (of the 
order of less than 0.3% of the total 
capital cost) 

  Power plant developers could recover costs through a 

tariff paid on electricity generated by CCS Ready power 
plants. 

  Developers of plants could be asked to maintain CCS 

 

Lack of economic incentives for 
CCS 

Ready planning documents and to report periodically on 
their CCS Readiness. 

Policy and 
Regulatory 

  Absence of a regulatory framework 
for CCS Ready; unified CCS Ready 
regulations; and CCS Ready 
related environmental, safety and 
other government-defined 
standards. 

Technical 

  Developers in China lack definition 
of CCS Ready criteria; and critical 
information, such as details of 
locations and characteristics of 
suitable CO2 storage sites and 
pipelines in China. 

 

The Government should “clarify the roles and 
responsibilities of relevant regulatory authorities and 
establish permitting requirements as well as 
environmental regulations for CCS”, with CCS Ready 
regulations integrated with existing approval processes.  

  A selective CCS Ready approach should be adopted in 
the power sector. It is recommended that a series of 
mega-coal power bases in China with a certain capacity 
(2 GW or higher) “should be sited within 200 kilometres 
of a major oil field or an assessed storage site”. 

  Government should ensure compliance is an important 

part of policy implementation. 

  Clear CCS Ready criteria should be set including 

requirements for capture, transport and storage. These 
requirements are summarised below.  

The report suggests the following framework for CCS Readiness in China: 

“(i) CO2 capture–ready guidelines are recommended to: 

a.  give developers the freedom to choose their preferred CO2 capture technology; 

b. 

identify key equipment for the CO2 capture and compression plant in and integrate it 
into the design of the power plant; 

c.  define a minimum percentage of CO2 to be captured from the flue gas, which will 

determine the additional land footprint that must be secured to allow for the retrofit; 

d. 

e. 

require a plant design that will provide sufficient space to integrate the capture and 
compression plant as well as additional piping and access roads to these plant 
components; 

require developers to (1) review whether municipal regulations necessitate 
adjustments in the plant design to comply with a maximum height limit for the 
equipment; (2) assess additional water needs and ways of recycling the cleaned 
water; and (3) work with concerned authorities to ensure the allocation of additional 
water to the plant at the same time it is retrofitted with CCS—if additional water is not 
available through traditional means, techniques like coal drying and water production 
from underground sources should be evaluated; 

19 

 
 
  
 
 
f.  provide guidelines on the treatment of additional wastewater from the CO2 capture 

plant; and 

g.  ensure that additional risks from capturing CO2 can be assessed. 

(ii) CO2 transport–ready guidelines are recommended to: 

a. 

require the project developer to (1) choose the technology that guarantees safe 
transport of liquefied CO2 from the power plant to minimize social health and 
environment risks; (2) identify a feasible transport route for the CO2 to the envisaged 
utilization or storage site to avoid conflicts over rights-of-way on surface and 
subsurface land; and (3) establish key design parameters for the transport system, 
such as transport capacity, pipeline length, pressure, and operating temperature, 
taking into account the need to meet CO2 quality specifications; 

b.  encourage the developer to explore the option of a pipeline network that links 

various large CO2 point sources to reduce unit costs; 

c.  ensure that risks from potential low-probability, high-consequence pipeline failure 

events can be addressed; and 

d.  complement the technical feasibility analysis for the power plant with a preliminary 

economic analysis for transport facilities. 

(iii) CO2 storage–ready guidelines are recommended to: 

a. 

require the developer to identify geological locations that are commercially 
accessible and technically able to store the full volume of captured CO2; 

b.  provide guidelines on the selection of suitable formations for CO2 injection and 

storage, including (1) adequate depth, (2) adequate confining layers, (3) adequate 
CO2 storage capacity of formations, and (4) adequate location, avoiding close 
proximity to urban agglomerations or protected sites of historic or natural value; 

c. 

require any conflicting surface and subsurface land uses at the storage site to be 
identified and addressed; 

d.  complement the technical feasibility analysis for the power plant with a preliminary 

economic analysis for storage, taking into account third-party liability insurance and 
CO2 monitoring and verification costs; and 

e. 

facilitate the preparation and publication of a comprehensive CO2 storage atlas for 
the PRC.” 

2.1.5.4  Key learnings and best practices 

■  The ADB report provides explicit and separate guidelines for each element of CCS: 
capture, transport and storage. These guidelines provide specific requirements for 
project developers to follow. 

■  The ADB report suggests that all coal power plants of above a threshold size (2 GW or 
higher) should be sited within 200 kilometres of a major EOR field or geological storage 
formation. This might not be feasible in the EU as some of the Member States plan to 
use offshore storage sites – mainly in the North Sea. However, it is possible to identify 
potential onshore CO2 capture clusters and potential shoreline hubs that will be 
connected to the offshore storage sites. 

■  The ADB report suggests that developers should be encouraged to explore the option of 
a pipeline network that links various large CO2 point sources to reduce unit costs. As 
explained above, CO2 pipeline networks in the EU are expected to connect onshore CO2 
capture clusters with onshore/offshore storage sites. 

20 

 
 
  
 
■  The ADB report recommends that a mechanism allowing power plant developers to 

recover CCSR costs by introducing a tariff for electricity from a CCS Ready power plant 
be introduced. 

■ 

It is suggested that plant developers be required to maintain CCS Ready planning 
documents for defined time periods and to report periodically on the CCS Ready status 
of plants. 

■  The ADB report suggests that the government could consider including CCS Ready 

requirements in the approval process of industrial sectors like iron, steel, and cement in 
addition to power plants. CCS readiness requirements for industrial sites could be 
developed in the EU.  

21 

 
 
  
 
 
 
 
2.1.6  Norway 

2.1.6.1  Background 

Norway operates the world’s oldest CO2 storage facility, a 0.9Mt/yr facility at Sleipner as well 
as the nearby field at Gudrun and a 0.7Mt/yr storage operation at Snohvit. All of these North 
Sea gas field operations separate the 10% or so of carbon dioxide from the extracted gas 
and return it to 3km below the coastal shelf505152. 

In July 2005, the Norwegian state set up Gassnova, a state enterprise company to stimulate 
RD&D and commercialisation of industrial scale CCS. Gassnova run a test facility at 
Mongstad, and are currently developing a pilot scheme at an the cement plant at Norcem 
Brevik, and may pursue 2 further feasibility projects at Yara Porshrunn (Fertiliser) and 
Klemetsrud Oslo (Energy from Waste)53. 

The Norwegian Government plans to deliver at least one large-scale CCS demo project by 
2020.52 Shipping is an attractive transport option for Norway. 

2.1.6.2 

CCS regulation 

The Norwegian Government’s CCS Strategy focuses on technological development and cost 
reduction.52 
The CCS related legal framework in Norway consists of54: 

■ 

■ 

■ 

“the Act of 13 March 1981 No. 6 Concerning Protection Against Pollution and 
Concerning Waste ("Pollution and Waste Act"); 

the Act 29 November 1996 No. 72 relating to Petroleum Activities ("Petroleum Act");  

the Act of 21 June 1963 No. 12 relating to Scientific Research and Exploration for and 
Exploitation of Subsea Natural Resources Other than Petroleum Resources ("the 
Continental Shelf Act").“ 

Additionally, CO2 emissions from petroleum activities are subject to a CO2 tax in Norway.  
Norway has developed legislation on the following subjects54: 

■  Permitting requirements for exploration and CO2 storage 

■  Access by third parties to petroleum facilities 

■  Transport of CO2 

■  Liability under the Pollution, Waste and Petroleum Acts 

■  Transfer of liability 

■  Public participation and access to information 

■  Environmental Impact Assessment 

50BGS, CO2 storage - Sleipner field beneath the North Sea, http://www.bgs.ac.uk/science/CO2/home.html 
51 GCCSI, Snøhvit, CO2 storage Project, https://www.globalccsinstitute.com/projects/sn%C3%B8hvit-co2-storage-project 
52Norwegian Government, 14.12.2014, The Government’s carbon capture and storage strategy, 
https://www.regjeringen.no/en/topics/energy/carbon-capture-and-storage/the-governments-carbon-capture-and-storage-
strategy/id2353948/ 
53 Mott Macdonald, 2013, NCCS Status Report Final for Gassnova, 
http://www.gassnova.no/en/Documents/NCCS%20Status%20Report%20Final%20for%20Gassnova%20(Issued%2030%20Jan
%202013).pdf 
54 GCCSI, Norwegian CCS legislation,: https://hub.globalccsinstitute.com/publications/dedicated-ccs-legislation-current-and-
proposed/norwegian-ccs-legislation (accessed on 1 April 2016) 

22 

 
 
  
 
                                                      
2.1.6.3 

Legislation for CCS readiness 

The CCS legislation in Norway does not explicitly address Article 33 of Directive 
2009/31/EC; however, CO2 emissions from petroleum activities are subject to a CO2 tax and 
Norway has already established policy that all new coal-fired generation incorporate CCS 
from the time of commissioning and operation.55 

Although there is no explicit CCSR legislation, Norway has been identified by GCCSI as the 
only country that is prepared for wide-scale storage without CO2-EOR.56  

In order to increase “national storage readiness”, the Norwegian Petroleum Directorate has 
published a complete version of CO2 atlas identifying possible CO2 storage sites on the 
Norwegian Continental Shelf. The atlas is based on the following information:57 

■ 

Information from more than four decades of petroleum activity in Norway – hydrocarbon 
project developers have to make a lot of geological information publically available; 

■ 

the ongoing CO2 storage projects – i.e. Sleipner and Snøhvit; 

■  Norwegian R&D;  

■  Climit; UNIS CO2 Lab; and other EU projects on storage and monitoring. 

2.1.6.4  Key learnings and best practices 

■  Norway has increased “national storage readiness” by establishing CCS legislation, 

developing a detailed CO2 Atlas and gaining experience from operational CO2 storage 
projects. Article 33 requires power plants with a rated electrical output of  
300 megawatts or more to identify suitable storage sites are available. As project 
developers in the EU rely on the data developed by the Member States, it is important 
that detailed/all data on bankable/practical storage capacity is available for potential 
project developers. 

■  Strong CCS policies or regulations (e.g. requiring all new fossil fuel-fired power plants to 
install CCS) may make CCS readiness requirements redundant. Similarly, in the EU, if 
CCS becomes mandatory, then Article 33 implementation is not necessary for power 
plants. 

■  For instance, if new power plants are required to consider storage site access (or 

proximity to potential onshore CO2 capture clusters and shoreline hubs) as one of the 
key criteria for siting, then these power plants can be connected to storage sites through 
large-scale shared CO2 pipelines or shipping, project developers may not be required to 
identify suitable storage sites solely for their projects.  

55 GCCSI, 2012, CCS ready policy and regulations – The state of play 
56 Global CCS Institute, 2015, Global Storage Readiness Assessment 
57 Norwegian Petroleum Directorate, 2014, CO2 Storage Atlas – Norwegian Continental Shelf 

23 

 
 
  
 
 
 
 
                                                      
2.2  Other case studies and reports on CCS readiness  

This section gives a generic definition of CCS readiness and summarises other relevant 
case studies and reports on CCS readiness. 

2.2.1  Generic definition of CCS readiness 

2.2.1.1 

International Definition of CCS Ready58 

ICF International and its partners developed an internationally recognised definition of “CCS 
Ready” for the Global CCS Institute in 2010. The proposed international definition of “CCS 
Ready” includes the following components: 

■  Components of capture readiness: Plant site selection; technology selection; design 

for capture facilities; space allowance; and equipment pre-investment 

■  Components of transport readiness: Transport method; CO2 transport corridor 

selection; and design of transport facilities 

■  Components of storage readiness: Storage site selection; verifying injectivity, 

capacity, and integrity of storage site; and design of storage facility 

■  Common components of CCS readiness: Conflicting uses and rights; cost estimates 
for CCS facilities; environmental, safety and other approvals; public awareness and 
engagement; sources for equipment, material and services; and ongoing obligations (i.e. 
file periodic reports with regulators on status of CCS readiness) 

The detailed requirements for each component shown above are presented in 0. The 
detailed requirements are presented at three different levels of stringency. The study 
explains the three levels as follows: 

■  Level 1 has the lowest cost and time expenditures for compliance by project developers 

and allows for the greatest amount of flexibility; 

■  Level 2 increases requirements through a greater level of design development for the 
capture facility; selection of transport corridors; and enhanced modelling of storage 
location, including desktop study of injectivity, capacity, and integrity; and 

■  Level 3 identifies the specific capture technologies to be retrofitted, requires acquisition 
of transport rights of way, establishes planning requirements, and requires geological 
exploration. 

Key learnings 

■  CCS readiness is defined by each of element of CCS (capture, transport, and storage) 

■  Three different levels of CCS readiness are described in the report, allowing for different 

levels of stringency to be applied to project developers.  

■  The proposed definition of “CCS Ready” requires power plant developers to file periodic 
reports (e.g. annually or biennially) after the initial assessment to confirm the CCS 
readiness of the plant.  

58 ICFI for GCCSI, 2010, Defining CCS Ready: An Approach to an International Definition 

24 

 
 
  
 
 
 
 
                                                      
2.2.1.2  Definition of storage readiness 

The Global CCS Institute has recently assessed 61 countries’ readiness for large-scale CO2 
geological storage projects and concluded that United States, Canada, Norway and Brazil 
are prepared for large-scale storage.59  

For the countries identified as having conventional storage potential, the assessment 
methodology includes the following criteria: 

■  Regional potential: whether the country has any suitable storage potential 

■  Regional assessment: based on the level of detail the country has completed in their 

assessments of national storage potential 

■  Dataset: whether the country has any data/datasets on deep sedimentary basins (e.g. 

exploration data or appraisal data) 

■  Assessment maturity: based on the country’s understanding of their storage potential 

(e.g. regional to country-wide or theoretical to practical capacity assessment) 

■  Pilot and/or commercial project: whether the country has enabled deployment of CCS 

projects 

■  Knowledge dissemination: whether the country has engaged in any dissemination 

activities. 

All of the important criteria shown above are clearly outside the control of the individual 
project developers, which suggests that a new power plant’s level of “CCS readiness” 
depends on the storage readiness of the country/region in which the plant is located. It is 
therefore important that detailed data on bankable/practical storage capacity is available to 
potential project developers.  

The report also recommends regional collaboration on storage assessments as this enables 
countries with low storage potential to use storage in other countries; allow more advanced 
countries to assist other countries with fewer resources; and encourages the transfer of 
methodologies and knowledge.  

Key learnings 

■ 

It is challenging for a project developer to be CCS ready unless the country in which the 
power plant or industrial site is located is CO2 storage-ready at the national level.  

■  Regional collaboration on carrying out multi-country storage assessments is 

recommended to increase the level of storage readiness at the regional level. 

2.2.1.3 

CO2 capture ready plants60 

This 2007 IEA report studies capture readiness in the power sector, with a particular focus 
on coal power plants. It reviews the literature and gives a summary of the components of 
CCSR, as well as a precis of the CCS technology options, and the costs and revenues from 
CCSR based on technology and retrofit date. 

It offers the following definition of CCSR, which aims to reduce the risk of stranded assets 
and ‘carbon lock-in’: 

“A CO2 capture ready power plant is a plant which can include CO2 capture 
when the necessary regulatory or economic drivers are in place.” 

The major findings of the report are that the CCSR pre-investment, while small compared to 
the overall plant costs, are unlikely to represent an attractive economic proposition if the date 

59 GCCSI, 2015, Global storage readiness assessment: an approach to assessing national readiness for wide-scale deployment 
of CO2 geological storage projects 
60 IEA GHG R&D, 2007, CO2 capture ready plants 

25 

 
 
  
 
                                                      
of CCS retrofit is a significant period of time after the plant commissioning date, due to the 
discounting of the future revenues associated with carbon capture. 

The report includes an important caveat that is still valid today: 

“None of the technologies is yet in operation at a full commercial scale and 
therefore there are a number of risks involved in the application of the 
technologies. These include [that] there is no commercial reference to establish 
the base cost of each of the technologies and therefore cost estimates are, at 
best, very approximate.” 

It also reviews the CCS technology options for combined cycle gas turbines (CCGT), but 
finds that these are a more expensive abatement opportunity that for coal power plants; it 
does not therefore include any CCSR recommendations for natural gas plants.  
Carbon Capture and Storage Progress and Next Steps61 

2.2.1.4 

This IEA report was prepared with the cooperation of the GCCSI, to coincide with the 2010 
Muskoka G8 Summit. It reviews the progress made on CCS across G8 member states and 
beyond in the context of the pledges made at the 2008 summit. As such the focus is mainly 
on the global project pipeline, and the national incentivisation of and progress toward 
commercial scale CCS. 

2.2.1.5  Definition of carbon capture and storage ready (CCSR)62 

The following definition of a CCSR facility is offered by this 2010 document, which was 
written by the CSLF: 

“A CCSR facility is a large-scale industrial or power source of CO2 which could and is 
intended to be retrofitted with CCS technology when the necessary regulatory and economic 
drivers are in place. The aim of building new facilities or modifying existing facilities to be 
CCSR is to reduce the risk of carbon emission lock"in or of being unable to fully utilise the 
facilities in the future without CCS (stranded assets). CCSR is not a CO2 mitigation option, 
but a way to facilitate CO2 mitigation in the future. CCSR ceases to be applicable in 
jurisdictions where the necessary drivers are already in place, or once they come in place.” 

On CCSR and retrofit, the report outlines a preliminary set of minimum qualifying criteria for 
a CCSR plant in a bespoke annex; these are technical, operational and economic studies 
that should be commissioned by the project operator and signed off by the regulator, 
specifically: 

■ 

“Carry out a site‐specific study in sufficient engineering detail to ensure the facility is 
technically capable of being fully retrofitted for CO2 capture, using one or more choices 
of technology which are proven or whose performance can be reliably estimated as 
being suitable. 

■  Demonstrate that retrofitted capture equipment can be connected to the existing 

equipment effectively and without an excessive outage period and that there will be 
sufficient space available to construct and safely operate additional capture and 
compression facilities. 

■ 

■ 

Identify realistic pipeline or other route(s) to storage of CO2. 

Identify one or more potential storage areas which have been appropriately assessed 
and found likely to be suitable for safe geological storage of projected full lifetime 
volumes and rates of captured CO2. 

61 IEA/CSLF, 2010, Carbon Capture and Storage Progress and Next Steps 
62 IEA/GCSI/CSLF, 2010, Definition of carbon capture and storage ready (CCSR) 

26 

 
 
  
 
                                                      
■ 

Identify other known factors, including any additional water requirements that could 
prevent installation and operation of CO2 capture, transport and storage, and identify 
credible ways in which they could be overcome.  

■  Estimate the likely costs of retrofitting capture, transport and storage.  

■  Engage in appropriate public engagement and consideration of health, safety and 

environmental issues.  

■  Review CCSR status and report on it periodically.” 

Though the report considers that more or less stringent implementations of these rules may 
be appropriate in individual countries or regions. 

A caveat associated with the aforementioned criteria is also stated: 

“These essential requirements represent the minimum criteria that should be met before a 
facility can be considered CCSR. However, a degree of flexibility in the way jurisdictions 
apply the definition will be required to respond to region" and site-specific issues and to take 
account of the rapidly changing technology, policy and regulatory background to CCS and 
CCSR, both globally and locally. More specific or stringent requirements could be 
appropriate, for instance, in jurisdictions where the CCSR regulator is working on the 
assumption that CCS will need to be retrofitted to a particular facility within a defined time 
frame.” 

2.2.1.6  Assessment of clean-coal strategies: The Questionable Merits of Carbon Capture 

Readiness63 

This 2015 paper examines the value of the CCS readiness of new coal plants through a 
bespoke Capital Asset Pricing Model (CAPM)64 model, and compares this value to 
alternative plant operator emissions reduction options, such as premature decommissioning, 
across a variety of probability weighted coal, electricity and carbon price scenarios out to 
2050. It then quantifies under which of these scenarios CCS retrofit for CCSR and non-
CCSR plants is value positive. 

The study argues that although CCS readiness dramatically increases the likelihood of CCS 
retrofit for a new coal power plant, the preferred compliance option for a plant operator may 
be to decommission that plant and construct a new CCS facility when CCS becomes 
commercially available, even where this is a short period into the plant lifespan. 

“… we find that the option of replacing older power plants including a premature 
shut-down  with  a  new  CCS  power  plant  is,  in  the  majority  of  investigated 
scenarios, found to be the preferred choice. In addition, we show that the option 
of replacing a new conventional coal-fired power plant (built in 2015) with a new 
CCS power plant is also much more likely than retrofitting a non-capture-ready 
or even a capture-ready power plant. 

For  the  value  of  capture-readiness,  we  conclude  that,  although  capture-
readiness  increases  the  chance  of  a  retrofit  strongly  in  comparison  to  a  non-
capture-ready power plant, the chances of conducting a retrofit are still low due 
to  the  additional  option  of  a  premature  shut-down  in  combination  with  a  new-
build CCS power plant.  

Expenditures for capture-readiness should therefore be well-deliberated.” 

63 Wilko Rohlfs, Reinhard Madlener, 2013, Assessment of clean-coal strategies: The Questionable Merits of Carbon Capture 
Readiness 
64 CAPM models value investment opportunities based on their volatility relative to the market, and their returns relative to those 
of a risk free instrument, typically 10 year government bonds, and to index funds which track market performance. 

27 

 
 
  
 
 
                                                      
2.2.1.7  Planning and Cost Assessment Guidelines for Making New Coal-Fired Power Generation 

Plants in Developing APEC Economies CO2 Capture-ready65 

This 2010 report describes work done by the Australian engineering firm Aurecon in 
developing CCS readiness guidelines for APEC member states. The scope of this work 
relates primarily to plant readiness, using the 2007 IEA definition, but it makes incidental 
reference to wider infrastructure issues. 

Given the report date, much of the analysis concerns uncertainty around legal, financial, 
incentives and technological barriers to CCS readiness. It explains in some detail the 
breakdown of the technical requirements and economic costs for plant CCS readiness, going 
into particular detail on a case study for the very common 600MW plant. The report also 
includes a review of CCSR capacity of nations in the Asia Pacific region. On the technical 
plant CCSR definition, it makes reference to the fact that some plants will already have 
implemented CCSR steps, such as flue gas desulphurization and de-NOx equipment 
installation. 

The report caveats the fact that considerable further analysis is required of APEC storage 
readiness, energy plans of some of the member states, global review of mechanisms for 
CCSR incentives, and the relative merits of the various technology options and associated 
industry experience, before national or regional CCSR designations can be sensibly 
implemented. 

Table 2.6: Range of pre-investment required for capture-readiness65 

Level of Pre-
investment 

Low 

Medium 

High 

Required plant modifications 

Identification of CO2 storage options 

 
  Allocation of plant space for additional equipment: CO2 scrubber, solvent regenerator, 
CO2 compressor, auxiliary boiler, ducting and possible booster induced draft fan. 

Identification of storage options 
Turbine steam piping modifications for future take-off 

 
 
  Allocation of plant space for additional equipment: CO2 scrubber, solvent regenerator, 

CO2 compressor, ducting and possible booster induced draft fan. 

Identification of storage options 

 
  Over-sized boiler for future steam take-off 
  Allocation of plant space for additional equipment: CO2 scrubber, solvent regenerator, 

CO2 compressor ducting and possible booster induced draft fan. 

65 Aurecon, 2010, Planning and Cost Assessment Guidelines for Making New Coal-Fired Power Generation Plants in 
Developing APEC Economies CO2 Capture-ready 

28 

 
 
  
 
 
 
 
 
                                                      
2.2.2  Country-specific case studies 

2.2.2.1 

Eskom Generation Project in South Africa 

In 2008 the South African state energy company Eskom was commissioned to build 2 coal 
power plants at Kusile and Medupi, which at around 4,800 MW would be the third and fourth 
largest coal power plants in the world66. Kusile was to be constructed as a CCS ready 
plant67; under a standard based on the IEA 2007 definition, though the Environmental Impact 
Assessment is not publicly available68. 

“a CO2 capture-ready power plant is a plant which can include CO2 capture 
when the necessary regulatory or economic drivers are in place” 

In 2015, ESKOM reported that while the plant has been built as CCS ready, the national 
policy framework does not support CCS and that in particular: 

“Stipulating carbon capture readiness in the Record of Decision (RoD) is not 
considered to be a sufficient regulatory framework for the actual deployment of 
CCS – transport and storage are still lacking.”68 

The above point is key in that ESKOM has argued that stipulating capture readiness without 
any regulatory framework for CCS deployment does not make sense. 

However, the South African Centre for Carbon Capture and Storage (SACCS) have made 
some progress in developing national capture readiness, including the creation of an atlas of 
potential storage locations69, as part of their roadmap to 2025 commercial delivery of CCS. 

ESKOM also pointed out that European and North American CCS operation and therefore 
capture and storage ready requirements are not directly transferable to South Africa, given 
the lack of available geological formations, lower grade coal stock and higher ambient 
temperatures. 

CCS for Coal-fired Power Plants in Indonesia 
The 2015 World Bank report CCS for Coal-fired Power Plants in Indonesia70 defines and 
evaluates the conditions under which fossil fuel power plants could be deemed as CCS 
Ready (CCSR), based on analyses of two archetypal candidate power plant designs:  
a 2 x 1000 MW lignite-fired power plant and a 1 x 600 MW coal power plant, modelled as 
commissioned in 2020 and 2022, respectively. It concludes that both candidate plants can 
be made CCSR at minimal capital cost increases and only minor modifications to the central 
generating plant, though there is an energy penalty of around 30% at a 90% capture rate 
based on the modelled amine capture technology. 

On CCSR in Indonesia, it finds the lack of policy and institutional support is a key barrier for 
CCS implementation in Indonesia, and that institutional, legal and regulatory frameworks 
around operation and monitoring need to be established, as well as support mechanisms 
that capture the environmental value of CCS. It recommends the creation of a national 
climate policy that supports CCS and the creation of a Road Map to Commercial Scale CCS 
rollout. It also encourages concerted government action along the CCS value chain, 
particularly for EOR. 

2.2.2.2 

66 ESKOM, 2011, COP17 Factsheet 
http://www.eskom.co.za/OurCompany/SustainableDevelopment/ClimateChangeCOP17/Documents/Kusile_and_Medupi_coal-
fired_power_stations_under_construction.pdf  
67 DEAT, 2007, Kusile Power Station Record of Decision, http://web.eskom.co.za/tenderbulletin/File_Show.asp?ID=119574  
68 ESKOM, 2015, CO2 Capture - Technicalities of Attaching a Capture Plant To Eskom’s Power Stations, 
http://www.sacccs.org.za/wp-content/uploads/2015/CCS%20Conference/2015%20CCS%20Conference%20-
%20Retrofit%20CC%20-%20MacColl%20Eskom.pdf 
69SACCS, 2010, Atlas on geological storage of carbon dioxide in South Africa http://www.sacccs.org.za/wp-
content/uploads/2010/11/Atlas.pdf  
70 World Bank, 2015, CCS for Coal-fired Power Plants in Indonesia 

29 

 
 
  
 
                                                      
To close the technical and financial gap, it recommends that: 

■  CCS Readiness provisions be mandated for new power plants, perhaps through their 

inclusion in Power Purchase Agreements (PPAs) 

■  The government provides policy incentives for future CCS implementation, and initiates 

CCS pilot and demonstration activities. 

It also advocates the establishing of an Indonesian Centre of Excellence in CCS technology, 
similar to the Norwegian Gassnova that builds technical and economic capability, develops 
an understanding of CCS in Indonesian conditions and promulgates the opportunities and 
limitations of CCS. 

2.2.2.3 

CO2 capture-ready Ultra Mega Power Projects in India 
The  2008  Mott  MacDonald,  CO2  capture-  ready  UMPPs  in  India  report71  examines  the 
opportunities  for  CCS  at  the  nine  4,000MW  Ultra  Mega  Power  Projects  (UMPPs)  in 
development in India. It estimates the cost of plant capture readiness at less than 1% of total 
plant capex (at up to £50m) and an  effective 2020  abatement cost of $33/tonne CO2 at an 
85% capture rate. 

Given the 2008 publication date and the technical focus of the report, there are few CCSR 
findings in the document. It posits that a cost benefit analysis is sufficient to ensure CCS 
readiness, even though the policy, regulatory and incentive frameworks for CCS are not well 
developed. It notes the need for government action to define plant CCS readiness, 
incorporating technical, transport and storage assessments, and to assist in the investment 
to produce capture ready UMPP design, the process of which would include: 

■  A technical and financial assistance package to the UMPP developer; 

■  As part of the above assistance package, an offer for secondment of international 
experts to the selected UMPP developer to assist with capture-ready design; 

■  Detailed exploration of routes to storage, including permitting and regulatory barriers to 

pipeline construction and exploration of export by ship where possible for the relevant 
site; 

■  Geological surveying of potential CO2 storage locations relevant to the specific plant, and 

of CO2 storage capacity for all of India; 

■  Development of detailed thermal performance and economic appraisal tools, focussed 

on specific UMPP sites; and 

■  A general review of regulatory barriers to CCS in India, identifying changes required to 

legislation and planning law before CCS retrofit to capture-ready plants, and the 
associated investor risks. 

2.2.2.4 

Large-scale storage of CO2 on the Norwegian shelf: Enabling CCS readiness in Europe72 

This 2013 report reviews Norwegian progress on the path to storage readiness for geological 
formations in the Norwegian North Sea. It concludes that while there are no insuperable 
barriers, greater technical knowledge will need to be developed, especially in geological 
modelling of long term CO2 migration, trapping mechanisms, reservoir pressure estimation 
and seal integrity. It makes the point that good quality data in these areas is expensive to 
obtain, and given the lack of obvious investment customers for the service, and the scarce 
financial incentives, this means that very little of it exists. 

It finds that in particular: 

71 Mott MacDonald, 2008, CO2 capture- ready UMPPS in India 
72 Grethe Tangen and Erik G. B. Lindeberg, Arvid Nøttvedt, Svein Eggen, 2013, Large-scale storage of CO2 on the Norwegian 
shelf: Enabling CCS readiness in Europe 

30 

 
 
  
 
                                                      
“To enable CO2 storage readiness by 2018, full reservoir simulations of CO2 
injection in selected targets should be conducted to demonstrate applicability of 
existing models and simulation tools, and to pinpoint critical limitations that must 
be addressed.” 

In order to achieve large-scale development solutions and infrastructure for CO2 storage in 
Norway, the study identified the following technical and non-technical gaps including 
development of design specifications for offshore CO2 injection into saline aquifers; 
implications of using CO2 as a primary method for oil production; business model for large-
scale CO2 infrastructure; and CO2 transportation across international borders. 

2.2.2.5 

The GDCCSR project promoting regional CCS Readiness in the Guangdong province, South 
China73 

This report gives an interim summary of the 3 year Guangdong, China’s First CCS Ready 
Province, (GDCCSR) a regional CCSR project. Guangdong is a coastal province; and the 
GDCCSR concludes that all viable storage reservoirs are offshore. The capacity of the 
offshore formations is assessed in the referenced 2009 CO2 Point Emission and Geological 
Storage Capacity in China, though this is a very preliminary report in the process toward 
storage readiness. The depleted undersea oil and gas field at the Pearl River mouth basin is 
identified as particularly well suited to use as a CO2 reservoir, with potential for EOR, and the 
report suggests that it should be CCSR assessed, though no subsequent, more detailed 
work appears to have been in this area. 

Although the Provincial Government stated in March 2010 that no further unmitigated coal 
plants would be permitted in Guangdong, GDCCSR modelling suggests that they key driver 
of CCS rollout will be the price of carbon relative to the price of storage. The value of CCS 
readiness was modelled by the project for a plant of the 1GW scale (over 30 GW were in 
construction or in planning at the time of writing), which finds that plant CCSR increases the 
likelihood of retrofit by 5-8% and brings the optimal CCS retrofit year forward. It also finds 
CCS retrofit has a large NPV, but the carbon price assumptions are not visible in the report. 

Finally, it assesses the value of creating a CCS Ready Hub at the province level, and finds 
that this reduces emission abatement costs by around 20%; however, no further details are 
provided in the report. 

“In contrast with making an individual project carbon capture ready, ‘CCS 
Ready Hub’ is a concept which requires implementation CCR at a regional 
level. Building a CCS Readiness Hub would not only require the CCR design in 
new plants, but also assess the economics of retrofitting existing power plants. 
Modelling results show that if ‘CCS Ready Hub’ concept is applied for the 
Shenzhen city, which is the city adjacent to Hong Kong, the average CO2 
abatement cost of CCS retrofit in 2020 will be reduced by ~20%.” 

2.2.2.6 

The potential for equipping China’s existing coal fleet with carbon capture and storage74 

This report assesses the potential for retrofitting 310 GW (55%) of China’s existing coal-fired 
power capacity with carbon capture and storage capabilities. A major contributor to global 
energy-related CO2 emissions, China released 8.6 billion tonnes of CO2 in 2014, with coal-
fired power stations representing about 50% of these emissions. Ultimately, the report 
concludes that emissions rates can be reduced by 85% through the application of CCS to 
existing power stations. 

73 Di Zhou, Daiqing Zhao, Qiang Liu, Xiao-Chun Li, Jia Li, Jon Gibbins, Xi Liang, 2013, The GDCCSR project promoting 
regional CCS readiness in the Guangdong province, South China73 
74 OECD/IEA, 2016, The potential for equipping China’s existing coal fleet with carbon capture and storage 

31 

 
 
  
 
 
 
                                                      
A key driver in the feasibility of CCS implementation for a given coal-fired power station is 
the distance between it and a suitable storage location. The study suggests that 385GW of 
China’s installed capacity from coal-fired plants is within a 250km radius of such a location. 

In terms of retrofitting existing plants, the report finds that although 55% of installed CEC 
(China Electricity Council) capacity could utilise CCS, it is conceivable that a much greater 
proportion of plants constructed post-2015 could be retrofitted at a reduced cost. 

Overall, for an adequate assessment of CCS readiness, the following factors must be 
considered: 

■ 

“The likely longevity of the proposed coal-fired plant under anticipated Chinese policies 
relating to local pollution, climate change and natural resources. 

■  Design of the power plant unit to ensure that heat can be provided with minimal impact 

on power generation efficiency, either from the steam turbine or an external heat source. 

■ 

Impact of the retrofit on local water availability. 

■  Distance to a good quality CO2 storage site with adequate capacity for the expected 
lifetime of the retrofitted plant, and without likely competition from other CO2 capture 
plants in the “carbonshed”75 that might prevent the future retrofit. 

■  Reservation of sufficient available space on site for the CO2 capture equipment. 

■  The possible pipeline routes if the plant is to use onshore CO2 storage, and whether they 

are likely to pose any significant geographic, political or social challenges, either now or 
in the future. 

■  The total expected economic costs and benefits of the future retrofit in comparison with 

other possible new build plant locations and designs, taking into account such factors as 
the respective future values of imported and domestically produced coal, the needs of 
the local and national power grids and the policy options for rewarding low carbon 
electricity generation. 

■  How the conditions for supporting the future retrofit will be maintained and developed 

during the operation of the unit before the time of retrofit.”

75 “Carbonsheds” are regions analogous to watersheds in which the estimated cost of transporting CO2 from any 
location in the region to the storage site it encompasses is cheaper than piping the CO2 to a storage site outside 
the region. Building on the discussion in this study, this definition can be extended to include the combined costs 
of CO2 transport and storage, and not the transport costs alone.  

32 

 
 
  
 
 
                                                      
3 

Conclusions 

A review of CCS Readiness legislation, studies and experience globally has provided important learnings that could be useful to developing Article 
33 guidance. The review has considered relevant legislation in Canada, the US, Australia, China and Norway, and other case studies and reports on 
CCS readiness.  

From these key learnings, which are summarised in the table below, conclusions have been developed. 

Table 3.1: Key learnings and recommendations for the EU Member States 

Global best practices and key learnings 

Conclusions in the context of Article 33 

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1.  USA has taken considerable steps toward “storage 

readiness”, with the market and infrastructure for CO2 
sequestration largely developed and assessed.  

1. 

2. 

It is challenging for a project developer to achieve CCS 
readiness unless the country in which the power plant or 
industrial site is located is CO2 storage-ready.  

3.  Regional collaboration for carrying out multi-country 

storage assessments is recommended to increase the 
level of storage readiness. 

4.  Norway has achieved storage readiness by establishing 
CCS legislation, developing a detailed CO2 Atlas and 
gaining experience from two CO2 storage projects. 

Increasing storage readiness in the EU: EU Member States 
could increase their storage readiness by carrying out 
collaborative multi-country storage assessments, developing CO2 
storage datasets, appraising storage units and supporting CO2 
storage projects. These requirements are already called for in 
Article 4(2) of the CCS Directive. To comply with Article 33, all 
combustion plants with a rated electrical output of 300 megawatts 
or more are required to ensure that suitable storage sites are 
available. As project developers in the EU rely on the available 
data on storage availability developed by the Member States, it is 
important that detailed data on bankable/practical storage 
capacity is available to potential project developers. 

 

5.  The Canadian regulations on temporary exemption from 

2.  Periodic progress reports: Power plant developers in the EU 

 

 

 

 

33 

 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
could be required to submit periodic progress reports to report on 
the CCS Ready status of the plant considering the CCS 
development (e.g. new capture technologies, better data on 
storage potential, etc.) and market conditions (e.g. fuel prices, 
Government incentives, carbon price, etc.). Power plant 
developers may be required to review:  

a.  storage suitability considering the most up-to-date data 

b. 

c. 

on sites; 
technical and economic feasibility of transport, 
considering the availability of nearby over-sized transport 
and storage infrastructure; and 
technical and economic feasibility of CO2 capture, 
considering cost reductions achieved and fuel prices. 

meeting an EPS requires power plant developers to 
submit regular progress reports, in addition to the initial 
information that must be submitted, to demonstrate the 
plant will be able to be retrofitted with CCS. 

6.  The proposed definition of “CCS Ready” by GCCSI 

requires power plant developers to file periodic reports 
(e.g. annual or biennially) after the initial assessment to 
confirm the CCS readiness of the plant.  

7.  The proposed CCS Readiness standards in Australia 

(which never went into force), required project 
developers to provide an annual report to the 
administering Authority on the power plant’s compliance 
with the CCS Readiness standards.  

8. 

It is suggested that plant developers should be required 
to maintain CCS Ready planning documents for defined 
time periods and to report periodically on the CCS 
Ready status of plants in China. 

9.  The ADB report suggests that all coal power plants of 

3. 

above a threshold size (2 GW or higher) should be sited 
within 200 kilometres of a major EOR field or geological 
storage formation in China. 

10.  Alberta’s Regulatory Framework Assessment promotes 

efficient and fair development of CCS by encouraging 
CCS project proponents to work together and allowing 
power plants to apply for access to another operator’s 
pipelines or storage sites.  

11.  The ADB report suggests that developers should be 

encouraged to explore the option of a pipeline network 
that links various large CO2 point sources to reduce unit 
costs. 

Identification of locations of potential CO2 capture and 
storage clusters and feasible CO2 pipeline routes within the 
EU: As CCS clusters are expected to be developed in the EU to 
minimise transport and storage costs, locations of potential 
clusters could be considered in the CCS readiness assessments. 
To achieve CCS Readiness, power plants in the EU could be 
required to be located close to potential onshore CO2 capture 
clusters and shoreline hubs. These could be identified by the EC 
and/or Member States by considering potential CO2 transport 
routes from onshore CO2 clusters to shoreline hubs / ports. If 
power plant developers can demonstrate that it is feasible to 
capture and transport CO2 to a nearby potential cluster, which will 
likely be connected to storage sites through large-scale shared 
CO2 pipelines or ships, project developers may not be required to 
identify suitable storage sites specifically for their projects.  

 

 

34 

 
 
 
 
  
 
 
 
12.  Three different levels of CCS readiness are described by 

GCCSI with different levels of stringency.  

13.  The proposed CCS Readiness standards in Australia 
(which never went into force) provided a list of six 
specific requirements and noted that the primary one 
was the assessment of likely costs of CCS being 
eventually deployed on the CCS ready plant, when CCS 
was deemed commercially ready. Similarly, it might be 
helpful to have a priority-driven list of requirements in the 
EU. 

4. 

Increasing the level of required CCS readiness over time: 
The Member States could require different levels of CCS 
readiness as the CCS market develops (e.g. Level 1 before 2020, 
Level 2 between 2020 to 2025 and Level 3 after 2025) – an even 
more stringent regulation could require all new fossil fuel-fired 
power plants to install CCS from the time of commissioning. 
Compliance with increasing CCS readiness requirements could 
be demonstrated by submitting periodic progress reports as 
recommended above. 

14.  Strong CCS policies or regulations (e.g. requiring all new 
fossil fuel-fired power plants to install CCS) may make 
CCS readiness requirements redundant. 

15.  The ADB report suggests that the government could 

consider including CCS Ready requirements in the 
approval process of industrial sectors like iron, steel, and 
cement in addition to power plants.  

5. 

Industrial CCS readiness: CCS Readiness requirements for the 
energy-intensive industrial sectors including cement, chemicals, 
refining, and iron and steel may be developed by the EC. Existing 
and/or new energy-intensive industrial sites may then be required 
to be CCS ready. 

16.  Learnings from the Boundary Dam project suggest that 

in addition to technical and economic feasibility of the 
power plant, some important financial and market 
considerations must be taken into account including 
government incentives, and the potential market for any 
by-products including CO2-enhanced oil recovery. 

17.  Deployment of CCS in USA has been driven by 

enhanced oil recovery opportunities and Government 
incentives at both federal and state level. 

18.  The OECD/IEA report on CCS retrofit in China suggests 
that likely longevity of the proposed coal-fired plant 
under anticipated Chinese policies relating to local 
pollution, climate change and natural resources should 
be considered for an adequate assessment of CCS 
readiness 

6.  CO2 utilisation opportunities and Government incentives: 
Economic feasibility assessment carried out by the project 
developers in the EU to demonstrate CCS Readiness could 
consider any available government incentives and potential 
market for any by-products including CO2-EOR. Although the 
carbon price in the EU is still low, potential government incentives 
and/or potential market for any by-products including CO2-EOR 
may improve commercial feasibility of CCS retrofit in the EU.  

 

 

 

 

 

35 

 

 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
19.  In addition to the newly constructed power plants, the 
Carbon Pollution Standards in USA apply to those 
existing units which are modified or reconstructed. CCS 
readiness requirements in the EU could also apply to 
existing power plants where they are modified or 
reconstructed. 

20.  US Environmental Protection Agency has introduced 
different standards for natural gas and coal power 
plants. Similarly, CCS readiness requirements could be 
differentiated for coal and gas power plants in the EU. 

The following recommendations could be considered in the longer term although they may not be 
required in the EU in the near term:  

  CCS readiness requirements in the EU could also apply to existing power plants where they are 

modified or reconstructed. 

  CCS readiness requirements could be differentiated for different types of fuel types (e.g. coal, 

21.  The Australian Government proposed to conduct a 

review every two years to test the commercial availability 
of CCS considering the technical, operational and 
commercial viability of CCS. 

 

gas, biomass, etc.) and for different technologies (e.g. open cycle gas turbine,  combined cycle 
gas turbine, integrated gasification combined cycle, combined heat and power, etc.) for the 
power plants in the EU. 
If more stringent requirements for CCS readiness are introduced in the EU, an incentive 
mechanism allowing power plant developers to recover stringent CCSR costs through could be 
introduced in the EU. 

22.  The Australian Government proposed that it would be 
mandatory for the power plants to implement the CCS 
retrofit within four years and complete the construction 
within seven years of the commercial availability of CCS 
being declared by the Government. 

23.  The ADB report recommends that a mechanism allowing 

power plant developers to recover CCSR costs through 
a tariff for electricity from a CCS-Ready power plant 
should be introduced in China. 

  European Commission and/or Member States may consider periodically reviewing CCS market 

conditions to confirm commercial availability of CCS in the EU. Capture-ready power plants in 
the EU might be required to be retrofitted with CCS within a reasonable time, once CCS is 
judged to be commercially available. This would reduce the risk of ‘carbon lock-in’ in the EU. 

36 

 
 
 
 
  
 
 
Annex - Information from reviewed material 

Checklist for the next coal power plant retrofit by SaskPower76 

1.  Capital costs make or break any project for a small power utility like SaskPower. With the intent of 
reducing capital costs, conduct an equivalent availability study to ascertain how much ”up time” 
would be required on the capture plant to meet regulations. 

2.  Would it be necessary to capture 90% of the CO2 in the flue gas or would 80% be acceptable? 

3.  What on-line timing and on-off delays would be required to operate both of the plants (power and 

capture)? 

4.  What efficiency improvements could be made in the power plant to generate the steam required 

for capture? 

5.  What would be the impact of coal quality and availability on the operation of both plants? 

6.  Simplify the power and capture plants. 

7.  What equipment was added to BD3 after construction in order to improve operation on the basis of 

safety, ease of use, maintainability, reliability, and efficiency of overall power generation? 

8.  What would be the critical pieces of equipment, and what would be their reliability in terms of 

maintenance and repair? Consequently, how many replacement units must be on site in the event 
of equipment breakdown? 

9.  Has there been a change in regulations or interpretation of regulations that might impact the level 
of required CO2 capture or even the need for CO2 capture (e.g. Equivalency Agreement)? Future 
regulations could be imposed upon emissions from alternative power generating facilities that 
could change the economics of comparisons. 

10.  Would it be better to over-achieve the regulated capture target or just meet the target? A smaller 
capture unit would require a lower parasitic load on the power plant, and somewhat lower capital 
costs. A larger capture unit would have the economic benefit of scale and could have an emission 
profile that would be significantly cleaner than NGCC. 

11.  Would the 300 MW units at Poplar River and Shand Power Stations, which already operate with 

more efficient turbines and are almost identical in design, be better, more cost effective targets for 
future retrofitting than the power units at Boundary Dam Power Station? 

12.  Modularize the plant so that large sections of it could be constructed elsewhere by more highly 
skilled tradespeople than could be enticed to work at the construction site. This could likely be 
achieved at a much lower construction cost. Site installation would also become simpler and 
would likely entail a much lower risk for cost overrun(s). 

13.  Continue the good work on operational standards and safety procedures that began with BD3 

(e.g. new confined space procedure, new PPEs, new chemical handling SOP, etc.). 

14.  Perform a labour market assessment for skilled trades and map out a construction schedule that 

would eliminate the impact of any possible shortage of skilled labour. 

15.  Fully develop design and engineering and let fixed-price contracts to eliminate cost overruns. 

16.  Reduce construction costs. This could entail packaging engineering and construction activities 

differently than BD3 and potentially modularization. 

17.  Ensure the next PCC unit would be similar enough to reduce technical, construction and operating 

risks based on the learnings from BD3. 

76 IEAGHG, 2015, Integrated Carbon Capture and Storage Project at Saskpower’s Boundary Dam Power Station 

37 

 
 
 
 
  
 
                                                      
18.  Continue to have the flexibility to generate power without capture and still meet regulatory 

requirements. This would likely necessitate PCC technology in the near term and most likely focus 
technology choices on amine-based capture as they would be the most mature and less 
technically and operationally risky. 

19.  Utilize a solid staff retention plan to avoid critical shortages in SaskPower staff that have gained 
invaluable experience from the BD3 ICCS project. This would include developing a SaskPower 
culture that would reward the behaviours and the stamina that would create a successful project 
outcome. 

20.  Ensure meaningful public engagement about the costs and benefits of clean coal broadly 

throughout the Province. Expect that public engagement would be more critical in a region where 
there would be no oil industry presence to support infrastructure to capture CO2 that could be used 
for EOR. Develop a communications and engagement plan accordingly. Public acceptance would 
doubtless necessitate a third party business investment and technology review for each proposed 
clean coal project. 

21.  Invest in the establishment of a CO2 end-use market amongst oil producers. This could require 
building a CO2 trucking infrastructure at the BD3 capture plant to support CO2–EOR pilots in SE 
Saskatchewan and to provide CO2 at a reasonable cost to oil producers that wish to pilot CO2– 
EOR at their operations. 

22.  Consider a change of “ownership” of the retrofitting projects. SaskPower is a power generation 
utility whose main job is to maintain facilities to ensure the “lights stay on”. It is not an EPC 
company that designs and builds major facilities on a regular basis. 

23.  Deploy a larger SaskPower group to work on the planning phase of the project if it would be 

reasonably certain the project would be approved. This would shorten the time from inception to 
operation and would minimize the burnout experienced during the BD3 ICCS retrofit project. 

38 

 
 
 
 
  
 
 
 
Reduction of CO2 Emissions from Coal-fired Generation of Electricity Regulations in 
Canada77  

Carbon Capture and Storage 

Temporary Exemption — System to be Constructed 

Application 

9 (1) A responsible person for a new unit or an old unit may apply to the Minister for a temporary 
exemption from the application of subsection 3(1) in respect of the unit if 

 

 

(a) in the case of a new unit, the unit is designed to permit its integration with a carbon capture 
and storage system; and 
(b) in the case of an old unit, the unit may be retrofitted to permit its integration with a carbon 
capture and storage system. 

Granting and content of application 

(2) The application must indicate the unit’s registration number and include the following supporting 
documents and information: 

 

(a) a declaration that includes statements indicating that 

o 

o 

(i) based on the economic feasibility study referred to in paragraph (b), the unit, when 
operating with an integrated carbon capture and storage system is, to the best of the 
responsible person’s knowledge and belief, economically viable, and 
(ii) based on the technical feasibility study referred to in paragraph (c) and the 
implementation plan referred to in paragraph (e), the responsible person expects to 
satisfy the requirements set out in section 10 and, as a result, to be in compliance with 
subsection 3(1) by January 1, 2025; 

 

(b) an economic feasibility study that demonstrates the economic viability of the unit when it 
operates with an integrated carbon capture and storage system and that 

o 

o 

(i) provides project cost estimates, with their margin of error, for the construction of 
the integrated carbon capture and storage system, and 
(ii) identifies the source of financing for that construction; 

 

(c) a technical feasibility study that establishes — based on information referred to in 
Schedule 2 related to the capture, transportation and storage elements of the carbon capture 
and storage system — that there are no insurmountable technical barriers to carrying out the 
following activities: 

o 

o 

o 

(i) capturing a sufficient volume of CO2 emissions from the combustion of fossil fuels 
in the unit to enable the responsible person to comply with subsection 3(1), 
(ii) transporting the captured CO2 emissions to suitable geological sites for storage, 
and 
(iii) storing the captured CO2 emissions in those suitable geological sites; 

 

 

(d) a description of any work that has been done to satisfy the requirements set out in section 
10, along with the information referred to in Schedule 3 with respect to that work; and 
(e) an implementation plan that provides a description of the work to be done, with a schedule 
for the steps necessary to achieve the following objectives: 

o 
o 

(i) satisfaction of the requirements set out in section 10, and 
(ii) compliance of the responsible person with subsection 3(1) by January 1, 2025 
when the unit is operating with an integrated carbon capture and storage system that 
captures CO2 emissions from the combustion of fossil fuels in the unit in accordance 

77 Government of Canada, Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations 
(SOR/2012-167) - Regulations are current to 2016-02-03 and last amended on 2015-07-01 

39 

 
 
 
 
  
 
                                                      
with the laws of Canada or a province that regulate that capture and that transports 
and stores those emissions in accordance with the laws of Canada or a province, or of 
the United States or one of its states, that regulate that transportation or storage, as 
the case may be. 

Granting of temporary exemption 

(3) The Minister must, within 120 days after receiving the application, grant the temporary exemption if 

 
 

(a) the application includes the documents referred to in subsection (2); and 
(b) the information contained in those documents can reasonably be regarded as establishing 
that 

o 

o 

o 

o 

(i) the unit, when operating with an integrated carbon capture and storage system, will 
be economically viable, 
(ii) the capture, transportation and storage elements of the carbon capture and 
storage system will be technically feasible, 
(iii) if applicable, a requirement set out in section 10 has been satisfied by work done 
before the application was made, and 
(iv) the responsible person will satisfy the requirements set out in section 10 and, as a 
result, will be in compliance with subsection 3(1) by January 1, 2025 when the unit is 
operating with an integrated carbon capture and storage system. 

Duration 

(4) A temporary exemption, unless revoked under section 13, remains in effect until December 31, 
2024. 

Requirements 

10 A responsible person who has been granted a temporary exemption in respect of a unit under 
subsection 9(3) must satisfy the following requirements: 

 
 

 

 

 

(a) carry out a front end engineering design study is to be carried out by January 1, 2020; 
(b) purchase any major equipment that is necessary for the capture element is to be 
purchased by January 1, 2021; 
(c) enter into any contract required for the transportation and storage of CO2 emissions from 
the unit is to be entered into by January 1, 2022; 
(d) take all necessary steps to obtain all permits or approvals required in relation to the 
construction of the capture element are to be taken by January 1, 2022; and 
(e) ensure that the unit, when operating with an integrated carbon capture and storage 
system, captures CO2 emissions from the combustion of fossil fuels in the unit in accordance 
with the laws of Canada or a province that regulate that capture and transports and stores 
those emissions in accordance with the laws of Canada or a province, or of the United States 
or one of its states, that regulate that transportation or storage, as the case may be, by 
January 1, 2024. 

Implementation report 

11 (1) A responsible person who has been granted a temporary exemption in respect of a unit must, 
for each calendar year following the granting of the temporary exemption, provide the Minister with an 
implementation report that indicates the unit’s registration number and includes supporting documents 
that contain the following information: 

 

(a) the steps taken during that year to construct the capture, transportation and storage 
elements of the carbon capture and storage system and to integrate those elements with the 
unit; 

40 

 
 
 
 
  
 
 

 

 

 

(b) any requirement set out in section 10 that was satisfied during that year, along with the 
information and documents referred to in Schedule 3; 
(c) a description of the manner in which those steps were carried out or those requirements 
were satisfied; 
(d) any changes, with respect to the information most recently provided to the Minister, to the 
proposed engineering design for the capture element, to the preferred transportation methods 
or routes or to the preferred storage sites, for the carbon capture and storage system; and 
(e) a description of any steps necessary, with a schedule for those steps, to achieve the 
following objectives: 

o 

o 

(i) the satisfaction of any requirements set out in section 10 that remain to be 
satisfied, and 
(ii) the compliance of the responsible person with subsection 3(1) by January 1, 2025 
when the unit is operating with an integrated carbon capture and storage system that 
captures CO2 emissions from the combustion of fossil fuels in the unit in accordance 
with laws of Canada or a province that regulate that capture and transports and stores 
those emissions in accordance with laws of Canada or a province, or of the United 
States or one of its states, that regulate, as the case may be, that transportation or 
storage. 

Due date 

(2) The implementation report must be provided by March 31 of the calendar year that follows the 
calendar year in question. 

Updated information 

12 If any event occurs or any circumstance arises that may prejudice the ability of the responsible 
person to achieve an objective referred to in paragraph 11(1)(e), the responsible person must send to 
the Minister, without delay, a notice that indicates the unit’s registration number and contains the 
following information: 

 
 

 

(a) a description of the event or circumstance and the nature of the prejudice; 
(b) an explanation of how the prejudice is to be overcome in order to ensure that the objective 
will be achieved; and 
(c) in relation to that explanation, an update to any information previously provided to the 
Minister under paragraphs 11(1)(c) to (e), together with any necessary supporting documents. 

Revocation — non-satisfaction or misleading information 

13 (1) The Minister must revoke a temporary exemption granted under subsection 9(3) if 

 
 

(a) the responsible person does not satisfy a requirement set out in section 10; or 
(b) any information indicated or contained in the application for the temporary exemption, in an 
implementation report referred to in section 11 or in a notice referred to in section 12 is false 
or misleading. 

Revocation — implementation report or reasonable grounds 

(2) The Minister may revoke the temporary exemption if 

 

 

(a) the responsible person has not provided an implementation report in accordance with 
section 11; 
(b) there are reasonable grounds for the Minister to believe that the carbon capture and 
storage system will not operate so as to capture, transport and store CO2 emissions as 
described in paragraph 10(e) by the date referred to in that paragraph; or 

41 

 
 
 
 
  
 
 

(c) there are reasonable grounds for the Minister to believe that the responsible person will not 
emit CO2 from the combustion of fossil fuels in the unit in accordance with subsection 3(1) by 
January 1, 2025. 

Reasons and representations 

(3) The Minister must not revoke the temporary exemption under subsection (1) or (2) unless the 
Minister has provided the responsible person with 

 
 

(a) written reasons for the proposed revocation; and 
(b) an opportunity to be heard, by written representation, in respect of the proposed 
revocation. 

42 

 
 
 
 
  
 
 
 
Proposed CCS readiness requirements in Australia78 
Mandatory requirements 
  Demonstrate sufficient space and access on site and within the facility to accommodate carbon 

capture and compression facilities for the majority of the plant’s CO2 emissions;  

  Proponents will submit a site plan that satisfactorily details the footprint of the CCS 
equipment needed (i.e. CO2 compression and capture equipment, chemical storage 
facilities) to capture the majority of the plant’s CO2 emissions. The site plan must allow 
sufficient space, as determined by design studies, for needed equipment, construction 
zone and the effective handling of environmental and safety issues. 

 

Identify potential areas for long term geological storage of captured CO2 (meeting the plant’s 
capture needs);  

  Proponents will estimate the total CO2 to be captured for the plant’s life and identify 

geological formations that could realistically store this amount. A storage assessment will 
evaluate the formations based on pre-competitive data, such as work completed by state 
governments, the Australian Government and the Carbon Storage Taskforce. 
Proponents are not required to obtain a permit for these areas until CCS must be 
retrofitted. A risk assessment must be included, including key environmental 
considerations, such as post-injection CO2 leakage and land use conflicts in the 
proposed basins, based on the information utilised in the storage evaluation. 

  Where a project developer proposes to use an option other than geological storage of 

CO2 to dispose of part of the captured CO2, the proponents must identify the proportion 
of CO2 expected to be disposed of by an alternative method and the site requirements 
and timeline for the conversion process plant. The Government may consider 
developments in emerging technologies in the future, and reassess the proportion of 
captured CO2 that may be disposed of by alternative methods. 

  Undertake a site specific assessment into the technical and economic feasibility of the CO2 

capture retrofit using one or more technology choices; 

  Proponents will identify an appropriate capture technology and prepare a feasibility study 
on retrofitting this technology into the plant’s design. This must include an economic 
analysis of capture implementation and identify environmental and safety approvals 
required. Proponents are not required to obtain these approvals until CCS must be 
retrofitted. 

 

Identify a realistic transport method to identified storage sites; 

  Proponents will identify a transport method technically capable of transporting the total 

CO2 to be captured for the plant’s life. Proponents must include an assessment 
addressing land use conflicts and environmental and safety approvals. However these 
approvals are not required to be obtained until CCS must be retrofitted. 
  Demonstrate measures and approvals that deal with the collection and treatment of pollutants 
resulting from the capture process and provisions for increased water requirements; and 

  Proponents will address further environmental considerations by providing an 

environmental impact statement. This must outline measures that will be taken to 
manage chemical wastes and increased water use including any environmental or safety 
approvals required. Proponents are not required to obtain these approvals until CCS 
must be retrofitted. 

  Estimate the likely costs of retrofitting capture, transport and storage. 

  Proponents will provide a detailed economic feasibility study of retrofitting CCS. 

Although all of the requirements must be applied, item 6 is classed as the key requirement.  

78 Australian Government, 2010,  A Cleaner Future For Power Stations, http://industry.gov.au/Energy/Documents/sustainability-
and-climate-change/DiscussionPaperCleanerFuturePowerStation.pdf  

43 

 
 
 
 
  
 
 
                                                      
Reporting 

Proponents will provide an annual report to the administering Authority on the plant’s compliance with 
the standards, ensuring that the Authority is aware of any change in circumstance that affects the CCS 
Readiness of the plant. Proponents must respond to developments in CCS and update feasibility 
assessments accordingly.  

How will CCS be assessed as commercially available?  

Several demonstration projects are planned in Australia as there are currently no plants operating at a 
level sufficient to demonstrate that the integrated technology is effective at scale. CCS is in a similar 
situation worldwide.  

New coal-fired generators covered by the CCS Ready standard will be required to retrofit CCS 
technologies within an appropriate timeframe after they become commercially available. A 
commitment of this nature requires a trigger point to define when CCS is considered commercially 
available and a defined appropriate time for retrofit.  

To determine whether CCS is considered commercially available the Australian Government, in 
consultation with bodies such as the Global CCS Institute and IEA, would undertake a review process 
every two years. The review would consider:  

 

 

the technical viability of CCS, and whether retrofitting a plant is both operable from an 
engineering perspective and of a comparable scale (an indicative scale-up will be advised at a 
future date);  

the operational viability of each element of the technology in conjunction with other elements 
(i.e. carbon capture along with CO2 transport and storage); and  

  Australia-specific factors affecting the commercial availability of CCS.  

Further, the Australian Government would define commercial availability as: 

 

integration of carbon capture, transport and storage has been proven at a comparable scale 
and technology in several demonstration plants worldwide;  

 

the systems comprising CCS are readily attainable; and  

44 

 
 
 
 
  
 
 
 
 

safety and environmental risks of CCS have been minimised (e.g. the potential for carbon 
leakage from storage sites).  

If the report positively assesses that CCS is commercially available, the Minister for Resources and 
Energy may make a declaration that a retrofit must occur. Due to the costs and planning involved with 
CCS being retrofitted to power generators, it is proposed that it will be mandatory to implement the 
planned CCS retrofit within four years and complete the retrofit within seven years of it being declared. 
This may allow the CCS retrofit to be implemented in a graduated manner.  

45 

 
 
 
 
  
 
References  

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46 

 
 
 
 
  
 
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48 

 
 
 
 
  
 
 
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doi:10.2834/604075